Pay Extra

forry · #1 (**permalink**) 04-24-2005, 09:04 AM

I understand the snowball plan, but sometimes you read where a person suggest paying extra on the bills. 10.00 more than the minimum etc.

Whats the best suggestion, the minimums or extra. Extra on all or extra on one and minimum on the rest.?

Thanks

Forry

kashi · #2 (**permalink**) 04-24-2005, 09:08 AM

I think one of the main reasons why people put extra on one bill and minimum on the rest is because you see the results faster on the "extra" bill. That one will disappear a lot faster, and you will feel good about getting it paid off quickly and moving on to the next bill. It's hard to see the fruits of your hard work if you pay extra on all your bills, and you might get unmotivated. I have to admit, it was true for me. When I finally paid off one of my college loans, I was ecstatic! Now on to the next one....

terry1156 · #3 (**permalink**) 04-24-2005, 10:55 AM

I think it basically comes down to the minimum payment doesn't help bring down the outstanding balance at all. Some people suggest paying $10 more on the other balances so that they also begin to go down so the whole process doesn't look as hopeless. But if you are taking $10 away from one payment to add to another one, it will all work out the same in the end

The $10 also seems to motivate some people to pay more overall toward debt. I think it depends on your personality. I think it was originally a gimmick from one of those gurus to make the plan seem like they invented something new and orginal

jhd815 · #4 (**permalink**) 04-24-2005, 05:03 PM

Hi,

In Jan 2004 I was about $12,000 in debt on credit cards. Just last month I became cc debt free. The first thing I looked at was the annual percentage rate on each card. The one with the highest APR is the one I worked on paying down first. So I put as much extra into paying off the highest apr card first, then once that was paid off, moved on to the next one and so on.

My opinion is this ... what will motivate you to keep on paying down debt? If you'd like to see a larger amount disappearing, I suggest my method. If you want to feel like you are tackling all of them, pay extra on all of them, but realize that the balances won't change as quickly.

Either way, you're doing the smart thing ... moving away from the web of credit card debt.

Good luck!

Jim D.