Question 1

Should I use the avalanche or snowball method to pay off debt?

Accepted Answer

Avalanche (highest interest first) saves the most money mathematically, but snowball (smallest balance first) provides psychological wins that keep you motivated. If rates are similar (within 2-3%), snowball works great. If one debt has significantly higher interest (10%+ vs 5%), avalanche saves substantially more.

Question 2

Should I use the avalanche or snowball method to pay off debt?

Accepted Answer

Avalanche (highest interest first) saves the most money mathematically, but snowball (smallest balance first) provides psychological wins that keep you motivated. If rates are similar (within 2-3%), snowball works great. If one debt has significantly higher interest (10%+ vs 5%), avalanche saves substantially more.

Question 3

When should I make extra debt payments?

Accepted Answer

Make extra payments after building a ,000-2,000 starter emergency fund but before saving for other goals. Target debts above 7% APR first. If you have employer 401(k) match, get that first (it

Question 4

When should I make extra debt payments?

Accepted Answer

Make extra payments after building a $1,000-2,000 starter emergency fund but before saving for other goals. Target debts above 7% APR first. If you have employer 401(k) match, get that first (it's free money), then attack high-interest debt, then finish your 3-6 month emergency fund.

Question 5

Is balance transfer or debt consolidation better?

Accepted Answer

Balance transfer (0% APR credit card) is better if you can pay off debt within 12-21 months and have good credit (670+). Debt consolidation loan is better for longer payoff timelines (2-5 years) or if you don

Question 6

Is balance transfer or debt consolidation better?

Accepted Answer

Balance transfer (0% APR credit card) is better if you can pay off debt within 12-21 months and have good credit (670+). Debt consolidation loan is better for longer payoff timelines (2-5 years) or if you don't qualify for balance transfer cards. Both work best if you stop adding new debt.

Question 7

How much faster will extra payments pay off my debt?

Accepted Answer

The impact is dramatic. For example, on 0,000 at 18% APR: paying 00/month takes 79 months and costs ,797 in interest. Adding just 00 extra (00 total) cuts it to 42 months and ,656 interest—saving ,141 and finishing 3 years earlier.

Question 8

How much faster will extra payments pay off my debt?

Accepted Answer

The impact is dramatic. For example, on $10,000 at 18% APR: paying $200/month takes 79 months and costs $5,797 in interest. Adding just $100 extra ($300 total) cuts it to 42 months and $2,656 interest—saving $3,141 and finishing 3 years earlier.

Question 9

Should I focus on debt payoff or investing?

Accepted Answer

Pay off debt above 7-8% APR before investing (except 401(k) match). Below 4-5%, consider investing instead as stock market historically returns 7-10%. For 5-7% debt, it

Question 10

Should I focus on debt payoff or investing?

Accepted Answer

Pay off debt above 7-8% APR before investing (except 401(k) match). Below 4-5%, consider investing instead as stock market historically returns 7-10%. For 5-7% debt, it's personal—pay off high-rate first, then decide. High-interest debt is a guaranteed 'return' on your money.

Complete Debt Payoff Planner

Strategic Approaches to Debt Elimination

Key Financial Terms

Debt Avalanche Method

Debt Consolidation

Debt Snowball Method

Frequently Asked Questions

Federal Reserve: Consumer Credit Statistics

National Foundation for Credit Counseling: Debt Repayment Strategies