If you are in credit card debt, the good news is that there are plenty of options when it comes to strategizing how to tackle it. One very common method to deal with credit card debt is the snowball method. Another very popular option is the avalanche method.
If you choose to tackle your debt with the avalanche method, this means that you will be targeting your debts that have the highest interest rates and paying those off first. One big advantage to the avalanche debt repayment method is that you will save a lot of money if you pay off your debt with this method.
What are the advantages?
The biggest advantage to the avalanche method is that it often results in you paying the least amount of interest. The way to structure your avalanche debt repayment plan is to categorize your debts by the highest interest rate. Once you have them categorized as such, you start paying off the highest interest rate debt no matter how large it is.
By going after the highest interest rate first, you ensure that you spend as little as possible on interest.
What are the disadvantages?
The biggest disadvantage to the avalanche method is that some individuals may feel as though they will never get anywhere, particularly if the debt with the highest interest rate is also a larger debt.
For these individuals, choosing the snowball method is often wiser. With the snowball method, you start off with the smallest debt, no matter what the interest rate is. With this method, you can continually knock out debts, which some people find very motivating.