I don’t normally write about other people’s posts, but I stumbled on one today from Plonkee Money about supercharging your debt snowball that I just had to mention, and make note of so I can do it myself.

The problem:  4 gazillion ways to do the debt snowball.  All having their benefits in one form or another, but two mainly standing out as the most popular: paying off debts lowest to highest by balance, just for the psyche of getting debts knocked out and staying motivated; and highest to lowest by interest rate, for the savings on interest.

Plonkee outlines a way to have the best of both worlds, by transferring balances from the highest interest (and presumably highest balance) to the (presumably) lower interest, lower (or non-existant) balance cards.

Given my debts, this is structured great for me.  My highest interest debt is my consolidation loan, which is also my largest balance (sans my 0% family loan).  My lowest balance debts (actually, my lowest limit cards that are paid off now) have the lowest interest.  So shuffling down some of the balance from my high balance debt to my lowest interest cards and continuing the debt snowball just like before makes sense.  If I can keep the balance perpetually on the lower interest cards while paying them off, then I would pay less interest in the long run.

I’ll have to investigate how much of a gain this would be for me.  Using purchase checks (which carry the same interest as a purchase with no fee) I could do this, but my payoff timeline is so short (only 4 months or so from the time my last credit card is paid off until the consolidation loan is paid off) that it might not be worth the time to do it.  However, for anyone who is working with less in their snowball and has longer debt reduction timelines, this would definitely be the way to do it.

It also has the added benefit of keeping you involved with your finances, which in my experience has been key to keeping on track.  It’s hard to lose track of the numbers if you’re so involved with them.

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