A very effective strategy to helping you fight your way out of debt is to use a snowball!  That is, utilize the snowball debt repayment strategy.

Think of your total debt as a snowball.  Paying off that debt is analogous to melting away the layers of snow, until it had completely melted.  The key here, is not to use your credit  in the meantime, otherwise you’re defeating the purpose of entirely eliminating your debt.  To curb your spending use another frigid solution: place your cards on ice… literally!  Freeze them in a water filled container in your freezer.  This way, you’ll have to go through the trouble of defrosting them if you need to use the card.  Hopefully this will give you the time to consider making a wiser spending decision.  But I digress…

Now, how do you employ this strategy?  Say you have three monthly debt payments:  a store credit card (such as a Sears or HBC card), a major credit card (such as a Visa, MasterCard, or AMEX), and a bank line of credit.

Listed are the interest rates on each of these debts, and the minimum percentage payment of the balance, and the total minimum monthly payment that you must make (let’s say you must only pay interest towards the line of credit, hence 0% in our example below).



Int. Rate

Minimum %

Min. Payment

HBC Card










Credit Line





So, in this example, your total monthly debt payments are: $38.39 + $76.16 + $70.83 = $185.38.

Now, you’re committed to paying off this debt, and have decided that you will allocate $250 per month to do so.  It’s not a significant amount, but it’s all you can afford at the moment.  Don’t worry, it’s a step in the right direction!

Now the snowball part:  each of these debts is one layer of the snowball.  The key here is to pay off the highest interest debt first (the outside layer of the snowball, so to speak), since it is costing you the most money that does not go towards the principal (the original amount borrowed).  Note however, that you always want to pay the minimum monthly payment to all your bills so you don’t get dinged with penalty charges, or worse: collection agents!

In the first month, since our HBC card has the highest rate, we pay the minimum balance on our Visa and Credit Line ($76.16 + $70.83 = $146.99), leaving us $103.01 to put towards the HBC card.  Now, we continue to pay $103.01 on to our HBC card until is has been entirely paid off.  Now’s the time to destroy your card and cancel the account.  Step one accomplished!

Now you continue as before, making your minimum credit line payment of $70.83, and now you have a whole $179.17 to pay towards your Visa every month!  Once it’s done, cut it, cancel it, and concentrate on the credit line!

Now that your other debts are paid, you can contribute the entire $250 per month towards paying down your credit line!

Paying off your debts isn’t easy, but once completed you have control of all your money.  In our example here, it’s like having an extra $250 per month to do with whatever you’d like!  Personally, I’d recommend saving or investing it, but that’s up to you.  It is your money after all.

Written by Juan William