| When you pay off the smaller balance (which won't take as long), you can then focus ALL your effort on destroying the larger balance. Having one less bill to pay means you can use the money that would've gone to that old bill to pay down the larger bill. If you start paying more toward the higher balance first, you still have to pay something toward the smaller balance - the smaller account detracts from how much you could pay toward the larger account. As a result, you're paying on two accounts for longer. It's the advice that many credit counselors and articles regarding paying off debt recommend. YOU brought in the higher interest rate component, which is not part of the "debt snowball" plan... the debt snowball plan only regards debt amount and assumes roughly equal interest rates. If the larger account has a considerably higher interest rate, the calculations need to be done to determine the best path to debt resolution (and if the people don't know how to do the calculations, they need to consult somebody who does).
"When you say this, will you be surprised if your arguments seem to move about instead of staying put? And will you accuse me of being Daedalus who makes them move, though you are yourself much more skillful than Daedalus and make them go around in a circle? Or do you not realize that our argument has moved around and come again to the same place? [...] Or do you not remember?" - Socrates |
