The most determined people using the snowball system to pay down their debt will cut up all their credit cards, or all but one for emergencies. They certainly will not carry the cards around in their wallets.
However, people who are used to using the cards on a regular basis, especially for any emergency which arises, might find it hard to do without the cards that they have been relying upon. But the simple fact of the matter is that even a few months of structured paying down of debt can add to significant savings if you stop using the card.
The trouble then becomes if they see the balance go down and the line of credit go up. This can give many people the impression that they have more money than they really do.
But remember, almost all credit cards are going to carry higher interest rates than any interest-bearing savings accounts. The main goals is to pay off the one with the highest interest rates as quickly as possible, but quickly may not be fast enough for impatient people.
By all means keep one card with low interest and a reasonable line of credit to use for emergencies, but otherwise, start paying down debt in a structured way on each card in turn in order to get yourself out of the octopus-like grip of credit card debt. It can easily drag you down if you are not careful.
Will it be easy? No, it will not. Sacrifices will have to be made. In the process of working through your budget each month, it will be difficult to see all that money going to the credit card companies while you live on a shoestring, but you need to make getting out of credit card debt a priority over everything else. As you will be able to see if you look at your credit card statement, the increase in your minimum that they suggest can add up to significant savings if you get started today.
Paying down debt takes discipline and patience, but think of it as a college degree. If you are carrying more than $8,000 in debt, you did not get there overnight, so you will certainly not be able to get out of it overnight unless you win the lottery, which is pretty unlikely.
Therefore, take some time each week, even each day, to check your budget and make sure you are on track with your financial goals. You will not only manage to become debt free, you will also have instilled such good habits that you will soon be able to apply the money you were paying in minimums to saving and investing instead. In this way, you can not only dig yourself out of debt, but also begin to lay a solid foundation which can help you and your family meet all of your financial goals.
Three years or so may sound like a long time to pay down the debt, but the stricter you are with yourself, the more you can apply to the balance and pay it off that much sooner. And once you pay once off, you will be able to apply those payments to the next high-interest rate credit card, to save you even more money.
By getting out of the ‘immediate gratification mindset’ and into one which takes a more long-term view, such as retirement or college, you can actively plan the future life you want to lead. Whether you continue to struggle to make ends meet, or have a more prosperous life is up to you. If you are tired of the credit card companies taking so much of your hard-earned money, now is the time to start paying down your balances.
The decisions that you make today and every day until you get out of debt and start accumulating substantial savings and investments are the ones that can hold you back, or spur you on to achieve the life of your dreams.