# How to Pay Off Credit Card Debt Using the Snowball Method

## Personal finance expert Dave Ramsey is well known for introducing the Snowball method.

Helping to eliminate credit card debt, the Snowball method has helped many people to become debt free. However, it isn't suitable for everyone. In order to decide whether you could eliminate your credit card debt using this method, you first need to understand what it involves.

### What is the Snowball Method?

By using the Snowball method, you will be paying off your lowest debt first. Out of your credit cards, which one has the lowest balance? Aim to pay that off first and then use the payment that you would have made for that debt, to pay off the others. Each time you pay off a little of your debt, it leaves you with more money to spend on the others.

Ideally, you will need to be able to afford more than the minimum repayment for at least one of your debts. When you focus on one debt at a time, it helps you to pay off your balance quickly. Just think, you are currently splitting up your payments and paying the minimum amount on each debt. If you increase the repayments on just one of them, you will pay it off quickly.

### How to Put the Snowball Method into Practice

If you would like to put the Snowball method into practice, say you have \$5,000 worth of debt on several credit cards. On one card you owe \$2000, on another you owe \$1250, then on another you owe \$1500, and finally n another card you owe \$250. You pay a minimum repayment for each one.

On the \$250 debt, you may be paying \$25 per month for example. If you manage to pay just the minimum for the higher debts, you could pay a little bit more towards the \$250 one. The more that you can pay off, the more you will save in the long run.

Then once you have paid the \$250 debt off, you can then use the \$25 minimum repayment to pay off the next lowest debt. You continue this until all of your debts have been paid off.

### When the Snowball Method Might Not Pay Off

There are some instances where the Snowball method might not be favourable to you. For example, it could work out more profitable for you to pay off the highest credit card debt first. You could save a lot of money in interest if you do it the other way around.

That is the only time when this method might not be suitable for you. However, most people do find it a lot easier to pay off their smaller debts first. As each debt is paid off, it gives you motivation to pay off the rest. That is why the Snowball method is currently so popular.

Eliminating credit card debt can be frustrating. However, by following the above method, you could get out of debt quicker than you think.

## Balance Transfer Credit Cards Comparison

Rates last updated July 17th, 2018
\$
% p.a.

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Name Product Balance transfer rate (p.a.) Purchase rate (p.a.) Annual fee Amount Saved Product Description
0% p.a. for 24 months with 1% balance transfer fee
13.49% p.a.
\$0 p.a. annual fee for the first year (\$59 p.a. thereafter)
Offers a 0% for 24 month balance transfer option, first year annual fee waiver and a competitive purchase rate.
0% p.a. for 24 months with 1.5% balance transfer fee
14.99% p.a.
\$49 p.a. annual fee for the first year (\$99 p.a. thereafter)
finder Exclusive: Receive 0% p.a. for 24 months on balance transfers and a discounted annual fee in the first year. Plus, access to Citi World Privileges.
0% p.a. for 24 months with 2% balance transfer fee
19.74% p.a.
\$90 p.a.
finder Exclusive: Take advantage of 10% cashback with amazon.com.au for 12 months (capped at \$25 per month).
0% p.a. for 22 months with 2% balance transfer fee
19.99% p.a.
\$0 p.a. annual fee for the first year (\$129 p.a. thereafter)
Offers a 0% p.a. for 22 months balance transfer, \$0 annual fee for the first year and an annual fee refund each year when you spend \$6,000.
0% p.a. for 24 months with 1% balance transfer fee
12.74% p.a.
\$0 p.a. annual fee for the first year (\$99 p.a. thereafter)
Platinum card benefits including complimentary insurance, plus first year annual fee waiver and 0% p.a. for 24 months on balance transfers.
0% p.a. for 18 months
20.74% p.a.
\$64 p.a. annual fee for the first year (\$129 p.a. thereafter)
Earn up to 60,000 bonus Velocity Points in the first 3 months and enjoy a discounted annual fee of \$64 for the first year.
0% p.a. for 20 months with 2% balance transfer fee
13.25% p.a.
\$79 p.a.
Receive up to 20 months interest-free on balance transfers with a 2% BT fee. Also enjoy exclusive offers with the home&Away Privilege Program.
0% p.a. for 15 months with 1.5% balance transfer fee
19.99% p.a.
\$0 p.a.
Save with 5% cashback on eligible purchases (capped at \$50 per month) for the first 90 days from approval. Plus, a 15 month balance transfer offer.
0% p.a. for 18 months
20.74% p.a.
\$64 p.a. annual fee for the first year (\$129 p.a. thereafter)
Take advantage of 0% p.a. on balance transfers for up to 18 months. \$64 in the first year (\$129 p.a. thereafter), plus, bonus Velocity Points.
0% p.a. for 18 months with 2% balance transfer fee
19.74% p.a.
\$30 p.a.
Receive complimentary purchase protection insurance, a 18 month balance transfer offer and special offers from Visa Entertainment.
0% p.a. for 14 months
11.99% p.a.
\$49 p.a.
Offers a \$49 annual fee, up to \$100 cashback when you make a purchase within 3 months and 0% p.a. for 14 months on balance transfers.
0% p.a. for 15 months with 1% balance transfer fee
20.99% p.a.
\$49 p.a. annual fee for the first year (\$149 p.a. thereafter)
Earn 100,000 reward Points, enjoy a long-term balance transfer offer, a discounted first year annual fee and complimentary travel insurance.
3% p.a. for 36 months
19.49% p.a.
\$0 p.a. annual fee for the first year (\$79 p.a. thereafter)
Receive a 3% p.a. for 36 months balance transfer and earn Qantas or Amplify Points per \$1 spent. Plus, enjoy a \$0 annual fee for the first year.
0% p.a. for 18 months with 1% balance transfer fee
13.74% p.a.
\$55 p.a.
Enjoy a 0% p.a. for 18 months balance transfer offer. Plus, up to 55 days interest-free on purchases.
0% p.a. for 18 months with 1% balance transfer fee
13.74% p.a.
\$55 p.a.
Enjoy a 0% p.a. for 18 months balance transfer offer. Plus, up to 55 days interest-free on purchases.
0% p.a. for 24 months with 1% balance transfer fee
12.74% p.a.
\$99 p.a.
Offers a long-term balance transfer, low ongoing purchase rate, complimentary travel insurance and access to a 24/7 personal concierge service.
3% p.a. for 36 months
19.49% p.a.
\$0 p.a. annual fee for the first year (\$79 p.a. thereafter)
Take advantage of 3% p.a. interest on balance transfers for 36 months. Plus, a \$0 first year annual fee and Amplify or Qantas Points per \$1 spent.
0% p.a. for 6 months with 2% balance transfer fee
0% p.a. for 9 months (reverts to 13.99% p.a.)
\$100 p.a.
Enjoy a 0% p.a. interest rate offer on purchases for 9 months and the protection of 7 complimentary insurances including overseas travel insurance.
0% p.a. for 12 months with 1% balance transfer fee
20.74% p.a.
\$0 p.a.
Earn uncapped Velocity Points on purchases, pay \$0 annual fee for life and take advantage of a 0% p.a. for 12 months balance transfer offer.
0% p.a. for 12 months with 1% balance transfer fee
20.74% p.a.
\$395 p.a.
Receive 50,000 bonus Membership Rewards points, a yearly \$400 Travel Credit and 2 entries per year to the American Express Lounge.
0% p.a. for 26 months with 2.5% balance transfer fee
20.99% p.a.
\$49 p.a. annual fee for the first year (\$149 p.a. thereafter)
Earn reward Points per \$1 spent, take advantage of a 0% p.a. for 26 month balance transfer offer, plus complimentary international travel insurance.
3% p.a. for 36 months
19.49% p.a.
\$0 p.a. annual fee for the first year (\$79 p.a. thereafter)
Take advantage of a 3% p.a. for 36 months balance transfer offer, Amplify or Qantas points per \$1 spent and enjoy a \$0 annual fee for the first year.

Interest rate

13.49

Annual fee

59

Interest rate

20.24

Annual fee

199

Interest rate

19.74

Annual fee

90

Interest rate

19.99

Annual fee

49
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