Web DebtSmart.com
DebtSmart.com
Thursday, October 30, 2014   
 
Household Math™: Debt Snowball (Myth or Magic): Paying Back Lower-Balance Cards First
by Scott Bilker
Scott Bilker
Scott Bilker is the author of the best-selling books, Talk Your Way Out of Credit Card Debt, Credit Card and Debt Management, and How to be more Credit Card and Debt Smart. He's also the founder of DebtSmart.com. More about and DebtSmart can be found in the online media kit.
 
Printable format
 
FREE subscription to DebtSmart® Email Newsletter and FREE software too!

Test your knowledge by trying to solve this DebtSmart, Household Math™ problem! After you complete the problem, you’ll get the solution and explanation.
 

1.

David Sheepsley has two credit cards with balances. Card A has a balance of $8,000 at 19.8% and minimum payments of $160 per month. Card B has a balance of $6,000 at 5.9% with minimum payments of $120 per month. David has a total of $400 per month to use for repaying his credit cards. What's the better plan for David?

Pay the most money possible per month to the lowest-balance card (B) first and make minimum payments to the highest-balance card (A) until the lower-balance card (B) is paid off. Then send the entire payment of $400 to Card A until that debt-repayment is completed.
Do the reverse. Pay the most money possible per month to Card A and make minimum payments to Card B until Card A is paid off. Then send the entire payment of $400 to Card B until that debt-repayment is completed.
I don't know!





 
Subscribe FREE and you receive the 5-Year Loan Worksheet software FREE!

"The DebtSmart Email Newsletter is packed with cutting-edge strategies for solving credit problems. I highly recommend it."--Gerri Detweiler, radio host and author of The Ultimate Credit Handbook





DEBTSMART MEDIA MENTIONS
NBC 10 News:
Money King Secrets
<Photos and Video>
CN8:
Art Fennell Reports
<Photos and Video>
CNN: CNN Newsroom
<Photos and Video>
CNN: American Morning
<Photos and Video>
ABC: Action News
<Photos and Video>
CNN/fn: Your Money
<Photos and Video>
<See all Television Interviews>


Subscribe to the DebtSmart® RSS Feed
     
   Add to Google