This Summer Is Not the Time for a Debt Repayment Avalanche

Even if your work is not subject to seasonal fluctuations, it seems like the most financially stressful time of the year.  The heat seems to make the drag, so those minutes you spend sitting in your car after arriving home from your second job, too tired to go upstairs to your apartment, seem even longer than they do in the winter, and even when you blast your air conditioning at maximum power, it is too hot to sleep.  You have already tried to get your landlord to fix the air conditioning, but your pleas seem to have had no effect.  Moving to an apartment where the AC works better is out of the question, since not only will the rent be more expensive, but you will need to gather the funds for a security deposit.  Even if your children are old enough to stay home alone while you are at work or young enough that daycare costs the same all year round, you have no energy to think about debt repayment.  You are in survival mode.  When they ask you to choose between the debt snowball method and the debt avalanche method, all you can do is hold an ice cube in the palm of your hand while you stand outdoors, watch how fast it melts, and think of how your paycheck gets used up just as quickly.  For help surviving the summer financially, contact a Philadelphia debt relief lawyer.

How Does the Debt Avalanche Method Work?

The debt avalanche is when you make minimum payments on all your debts except the one with the highest interest rate.  You put all the extra money in your budget each month toward paying down this debt.  Economists love the debt avalanche method because it saves you the greatest amount of interest.  The debt with the highest interest rate might be something big, like a car loan or a credit card with a five-figure balance, so it is not immediately obvious to you that you are making progress on your overall debt situation.  If you need encouragement, look at the statements each month for the high interest debt you have chosen to tackle, and watch the interest charges get gradually smaller, even if it takes you years to pay the debt all the way off.

It Is Easier to Keep Your Cool With the Debt Snowball Method, Unless You Are an Economist

From a mathematical perspective, the debt avalanche method is the clear winner, but it feels like a slog when you are living paycheck to paycheck except for the ten dollars per month that you can afford to pay toward one of your debts.  The snowball method is popular among consumers, because you can see results quickly.  You put your extra ten bucks, or however much money is available, and pay it toward the debt with the lowest outstanding balance, while paying the minimum on all the others.  This debt will quickly get smaller and disappear, and then you will have more money in your budget to pay toward the next smallest debt.

Contact CONSUMERLAWPA.com About Credit Card Debt

A Philadelphia consumer law attorney can help you address your credit card debt and other consumer debts.  Contact CONSUMERLAWPA.com to set up a free, confidential consultation.

Source:

cnbc.com/2025/04/18/americans-biggest-misconception-about-managing-credit-card-debt.html