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Susan Tompor: How do you pay off all that credit card debt?

Susan Tompor, Detroit Free Press on

Published in Home and Consumer News

"It's like 'Oh, wait a second, I need to get some things in order,' " said Zangardi Haynes, who is a member of the National Association of Personal Financial Advisors.

Two strategies exist: The avalanche or the snowball approach.

Typically, if you want to save the most in interest charges, you'd take a strategy to pay the monthly minimum required on each credit card to avoid fees -- and then apply as much money as possible toward the credit card that charges the highest interest rate.

Once that card is paid off, you add more money to the next highest-rate card and then the next until you pay off all your cards.

Zangardi Haynes, who lives outside Richmond, Va., calls that approach the avalanche, as the payoff can be huge and fairly swift.

But the snowball approach can be a little more fun, she said. Again, you'd make your minimum monthly payment on each card. But then aim to put most of your money toward the credit card with the smallest balance.


Why? You'd pay off the first credit card more quickly and then move to the next card with a small balance to pay that one off, too.

It's kind of like a good hit in a snowball fight.

"You get a psychological win that can sometimes be motivating for people," she said.

Pay attention to the interest rates on your credit cards


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