Living life in New York receives an upgrade when a person does not have to worry about mounting debt. Using the snowball method, focusing on paying off smaller debts before concentrating on larger debts, can act as an effective way to pay off debt and manage one’s finances.
That said, Credit Karma offers both advantages and disadvantages to using this particular method. Gaining an understanding of both sides allows consumers to make better-informed decisions about the best way to handle their debt.
Advantages of the snowball method
Whittling away at smaller debts imbues a person with a mental boost to stay the course and keep working toward eliminating larger debts. The act of crossing off debts can eliminate a great deal of the anxiety and financial problems trigger. It is also beneficial to focus on a few debts rather than several debts. Throughout the process, a person can develop a better relationship with money.
Disadvantages of the snowball method
Like most seemingly great things in life, the snowball method is not without its downfalls, as noted by Better Credit Blog. One of the biggest disadvantages is that some financial experts recommend closing credit card accounts after paying them off. Doing so negatively impacts a person’s credit score. Another disadvantage is the possibility of paying more money in interest than necessary by focusing on debt amount rather than debt interest rate.
Researching and trying different methods to pay off debt allows consumers to find one that works best for them. A blend of methods could offer the best pathway to better financial health.
