Re: SCHOOL LOANS are crushing me...what can i do?
I have to disagree on this, at least to a certain extent.
Originally Posted by Hedwig
If your highest interest card carries a huge balance, and you've got half a dozen other cards with smaller balances, it's often very productive to pay off the low balance cards for two reasons:
1. It provides the borrower with a boost in self-confidence -- s/he can see that actual progress is being made at paying off her/his debt. As in, look: an actual account was PAID OFF! This helps provide INCENTIVE to the borrower to keep at it by showing tangible progress (instead of just a HUGE number changing to an ALMOST HUGE number on one single card).
2. By paying off a credit card, you can now roll what you used to be paying towards that card into the next card. And when that one is paid off, roll BOTH of those into the next. Hence, the "snowball" effect. If you have 6 cards and can pay 4 of them off completely in 6 months, then tackle the last two (with large balances) by rolling all the previous monthly payments (from the other cards) into THOSE cards, it really helps.
- As you wander through this life, no matter what your goal,
Keep your eye upon the donut and not upon the hole.