Credit Catastrophe part 2
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- One method is called the snowball method. This is when you start with the debt with the lowest amount of money you owe and work to pay that off first. You put a monthly payment towards that payment, and then you go to the next one once that is payed off. It's like a snow ball effect (hints the name).
- That sounds like a very good way of getting my debt payed off!
- It's found that they both take around the same amount of time. It's really just up to how much money you put into you're monthly payment and which method you feel more comfortable with.
- It is! But, there is also the avalanche method.
- The avalanche method is when you start with the debt that has the highest interest rate and pay that off first, and then move to the next highest, and so on.
- Hmm that sounds like a good one too! But which one would help me pay my debt off faster?
- Oh what's that one?
- I think I'll do the avalanche one! I'd rather get the big stuff out of the way first.
- Well thank you so much for helping me come up with a plan! I know what I need to do now.
- Good choice! Good luck!
- Anytime! What method are you going to choose?
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