Snowball, Avalanche, or Chill?

Reading the news can fill you with dread, and most Internet content is designed to play on your insecurities, even if they are of a personal nature, but you can also count on the Internet to find evidence that there are other people out there who are even more hopeless than you are. According to a recent article on CNBC Make It, 40% of Americans believe that making the minimum payments on their credit cards is enough to keep them from sinking deeper into debt.

At least you can count yourself among the top 60% of financially savvy people, but this is cold comfort when you consider that you know that you are getting nowhere by making the minimum payments, but you keep making them, because you cannot afford to pay more than that. You have to do something about your credit card debt, or else you would have to break the world record for longevity to pay off your credit card debt in your lifetime. For help choosing the best strategy for addressing your credit card debt and other debts, contact an Oakland lawsuits, collections, and creditor harassment lawyer.

Economists Prefer the Avalanche Method

If you ask an economist, they will tell you that the best way to pay off your debts is the avalanche method. In this method, you rewrite your budget so that you make minimum payments on all your debts except the one with the highest interest rate, redirecting as much of your paycheck as possible toward paying down this highest interest debt. For many consumers, a credit card is the target of the debt avalanche. By following this method, you get the greatest savings on interest over time, but it can take a long time before you can feel your debts getting smaller.

The Snowball Method Wins on Vibes

Consumers prefer the debt snowball method, much to the annoyance of professional economists who have never lived paycheck to paycheck. In this method, you rearrange your budget by making minimum payments on all your debts except the one with the smallest outstanding balance.  Once this one gets paid off, you direct as much money as possible to the next smallest one. If you do not know what it feels like to desire an emotional boost more than a financial boost, you have never struggled financially.

When Snow-Related Metaphors Leave You Cold

In California, no one can relate to snow metaphors.  Furthermore, we do not have time to pay down our debts little by little. Perhaps it is time for a bigger intervention, such as settling your credit card debt or discharging it in bankruptcy court.

Contact the Law Office of Melanie Tavare About Getting Out of Credit Card Debt

A debt relief lawyer can help you if you can only afford minimum payments on your credit card, and you are ready to get off the minimum payments treadmill.  Contact the Law Office of Melanie Tavare in Oakland, California, or call (510)255-4646 for a case evaluation.