The debt-snowball method is used by many people to strategically and mathematically reduce the amount of debt that is owed. However this method has drawn criticism since many believe that paying off the debt in time instead of using such doctoring in hind-sight is far more effective. On the other hand it cannot be denied that this method offers a scientific and systematic way to get out of debt in a timely manner without complicating the pay-off.

• In this method, the lowest amount of debt is first paid off and the highest amount is paid last. However there is another way of snowballing the debt by giving priority to those debts that have a higher interest rate instead of the ones which have bigger balances but lower interest rates. The second method of paying off debt is considered to be psychologically satisfying since smaller debts can be quickly paid off. However, the first method in which the payments go to higher interest rate items first is much more pragmatic and is recommended.
• Snow-balling the debt is a simple method where a debtor can start making payments to the amount which has the highest interest rate. This means that those items with high interest rate are paid off using any additional funds available at the disposal of the debtor. All the other payments can be minimum payments and no more; however for the debt which is being snowballed, the payment is the minimum plus any additional capital available to reduce it. The process is repeated on a monthly basis till the debts are paid off one by one.
• Snow-balling may be effective for many people; however it is not recommended for those who are unable to control their balances (especially on credit cards). This is because this method requires some amount of discipline and penny-pinching at the same time. If a person starts to use the high interest rate product once again before all the debts are paid off then it is of no use since the amount owed will again increase instead of decreasing.
• There are many advantages as well as disadvantages to this method and an obvious benefit is reduction of the complete amount of the debt that is owed. However, a disadvantage is that if the debtor decides to use one of the loan products then the debt will again increase and subsequently mess up the schedule for snow-balling of the debt. Those who want to opt for snowballing are usually those who are under immense personal debt. This means that it is better not to use this method if you are unsure whether you can avoid the temptation of using one of the open lines of credit.

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