Paying off debt

by Jennifer
(Canada)

A few years ago I had a significant amount owing on my line of credit, and some on my credit card. I realized that I had to get out from under, and at the same time remain responsible to my debt. So, I ended up doing what I call the "snowball" payment plan. I paid off my credit card over a period of time, but not minimum monthly amount. It was the lesser of the two debts, and had the higher interest. I had a total of $600/month to spare towards debt reduction. The interest on the LOC was about $100/month. So I would pay $500/month on the credit card until paid off & the minimum $100/month on the LOC. Once the credit card was paid off, I "snowballed" the $500 into the LOC along with the $100 I was already putting in to pay it off.

If you have several debts, use the same snowball plan, paying minimum on all but the smallest debt. It gets the larger portion until paid off, and then move on the next smallest, etc.

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