Because oftentimes they think it is a magic wand of sorts – that it will cause all their debt problems to disappear.
Unfortunately that's not the case, and in many instances people end up making their situations worse by signing up for a debt consolidation loan.
Step 3 – Once the card with the smallest balance is paid off, take the amount you were paying towards that card and apply to the card with the next lowest balance.
Step 4 – Keep on keepin’ on until ALL the cards are paid off.
Here’s Dave Ramsey’s Snowball Method for paying off credit cards: Step 1 – Make a list of all your credit cards, ranked in order from the highest balance to the smallest balance.
Step 2 – Beginning with the card with the smallest balance, pay as much as you can on that card while paying the minimums on the other cards.
Now, contrast Dave’s Snowball Method with Suze Orman’s Method found in The Road to Wealth: Step 1 – Figure out the largest possible amount you can afford to pay each month toward all your credit card balances together.
Step 2 – Add to each minimum payment that your credit card company is asking you to pay.
That’s the premise of the “snowball” method of debt repayment.
The reason I haven't written about debt consolidation until now is because in most instances I'm not a big fan of doing debt consolidation.
Many of the debt consolidation companies that you'll find out there really aren't going to do much for you that you already can't do on your own – and they'll charge you an arm and a leg to do it.
Student loans are a drag and can weigh you down, especially when you enter into the real world and start your career.
Many students are stuck with roughly ,000 or more in student loan debt. Unfortunately, students will often choose to receive a degree in a field that will never make them any money.