Paying Down Credit Cards: Go With A Snowball Or Avalanche?

Paying Down Credit Cards: Go With A Snowball Or Avalanche?

By Carolyn Bigda, Chicago Tribune (TNS)

During the holidays it’s easy to add a few inches to your waistline — and to the balance on your credit card.

According to estimates by, which keeps track of credit card trends, total outstanding credit card debt was likely to exceed $900 billion by the end of 2015, up from $872 billion the year before.

Piling on new debt now could be costly, though, if the Federal Reserve continues to increase interest rates this year (which pushes up the rates on credit cards).

So to help you get back into the black, consider these strategies:

Look for zero-percent offers: Many credit card issuers offer a temporary zero-percent rate on balances that you transfer when you sign up for a new card.

You can search for such offers online, but one of the best deals available now is the Chase Slate card, which has 15 months of zero-percent interest on balance transfers and no fees for transfers made within 60 days of opening the card, said Kali Geldis, editorial director at, an online resource about credit.

To qualify for the card, you need a strong credit rating, which generally means a score of 700 to 850.

If you’re young and just building a credit history _ and therefore don’t have a mighty score yet — you may have to shop around for other deals.

Geldis said one card to consider is Capital One QuicksilverOne, which has a zero-percent rate through September on balance transfers. The catch: The card carries an annual $39 fee.

“But if you make the most of those nine months of zero interest, it can be worth it,” Geldis said, noting that any additional purchases on the card earn 1.5 percent cash back.

Request a lower interest rate: If you don’t want to switch credit cards, another option is to ask your current issuer for a lower interest rate.

“People with the best credit are always the most likely to get breaks from the banks,” said Matt Schulz, senior industry analyst at, which lists credit card offers. But, he said, the credit card marketplace is very competitive, so you may have some negotiating power.

“If you’re a 20-something with relatively low balances and a good history of paying on time, it’s definitely worth making that phone call,” he said.

Go with a snowball or avalanche: Once you’ve secured the lowest interest rate for your outstanding balance, the next step is to figure out a strategy for paying off the debt.

If you have multiple cards, you can pick between two options.

With one, the “snowball” approach, you pay off cards with smallest balances first (while still making minimum payments on your other cards). In doing so, you may feel a sense of accomplishment and get the motivation you need to keep paying off your debt.

With the second approach, the “avalanche,” you tackle the cards with the highest interest rate first (again, while making minimum payments on other cards), helping you pay less interest over the long run.

Both methods work well, although if you want to pay off your debt as quickly and inexpensively as possible, you should choose for the avalanche.

And it’s always a good idea to pay more than the minimum on your cards, said Bonnie Sewell, a financial planner in Leesburg, Va. To do so, she suggested picking up temporary work, such as house sitting, dog walking or signing up for odd jobs on

What about cash you might have received for the holidays?

“My strongest suggestion would be to bank it, so that you slow down your credit card purchases,” Sewell said.

Carolyn Bigda writes Getting Started for the Chicago Tribune.

(c)2016 Chicago Tribune. Distributed by Tribune Content Agency, LLC.

Photo: Computer chips are seen on newly-issued credit cards in this photo illustration taken in Encinitas, California September 28, 2015. REUTERS/Mike Blake

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