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Updated –January 10, 2019

Digging out of credit card debt can feel frustrating, intimidating and ultimately impossible. Fortunately, it doesn’t have to be any of those things if you learn how to take control.

Paying down debt is not only about finding the right financial tools, but also the right psychological ones. You need to understand why you racked up credit card debt in the first place. Perhaps it was a medical emergency or a home repair that needed to be taken care of immediately. Maybe you’d already drained your emergency fund on one piece of bad luck when misfortune struck again. Or maybe you’re struggling with a compulsive shopping problem, so paying down debt will likely result in you accumulating more until the addiction is addressed.

You also need to understand what motivates you to succeed. Do you want to pay down your credit card debt in the absolute fastest amount of time possible that will save more money or do you want to take some little wins along the way to keep yourself motivated?

Here’s a couple strategies consider as you learn the best way to handle credit card debt — and pay it off quickly.

2 common credit card debt repayment strategies

These repayment strategies can help you pay off credit card debt quickly. Keep in mind, you can use these strategies even for non-credit-card debt:

  • Debt avalanche: Focus on paying off the credit card with the highest interest rate first. Then, work your way down. This strategy can save you money on interest and get you out of debt sooner.
  • Debt snowball: Pay off your smallest debts first. Doing so can motivate you to continue making payments as you climb out of debt.

You don’t necessarily need to pick the repayment strategy that gets you out of debt the fastest. After all, if your repayment strategy doesn’t keep you motivated, you may not stick to it.

Using a personal loan or balance transfer credit card

As you seek to repay your debt, you could consider a personal loan or balance transfer credit card with a lower interest rate than on your existing debt. Transferring your debt to one of these financial products could help you reduce long-term interest costs.

But you’ll first need to learn whether or not you’re eligible. Your credit score will play a big role in determining your eligibility for a personal loan or balance transfer card. Use our widget below to figure out if a personal loan or a balance transfer is the best option for you!

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Please enter information below and we’ll provide the best option to consolidate your credit card debt!

If you have a credit score above 640, you have a good chance of qualifying for a personal loan at a much lower interest rate than your credit card debt. With new internet-only personal loan companies, you can shop for loans without hurting your score. In just a few minutes, with a simple online form, you can get matched with multiple lenders. People with excellent credit can see APRs below 10%. But even if your credit isn’t perfect, you might be able to find a good loan to fit your needs.

Not sure what your credit score is? Click here to learn how and where to find out. If you know your credit score needs some work but not sure of what can be done, click here.

If you have a score above 700, you could also qualify for 0% balance transfer offers. We will talk more about balance transfers below but this option is the best way to pay off credit card debt if you’re able to qualify for a 0% APR balance transfer credit card.

A credit score of less than 600 will make it difficult for you to qualify for either option. If you have a credit score less than 640, struggling to make monthly debt payments and would like to explore your options to reduce your debt by up to 50%, then please click our option below to customize a personal debt relief plan.

Custom Debt Relief Plan

Now let’s talk about the financial tools to add to your debt repayment strategy in order to dig out of the hole.

Let’s say you have $10,000 in credit card debt, and are stuck paying 18% interest on it.

You already know that putting as much spare cash as you can toward paying down your debt is the most important thing to do. But once you’ve done that, so what’s next?

Use your good credit to make banks compete and cut your rates

You could save $1,800 a year in interest and lower your monthly payments based on several of the rates available today. That means you could pay it off almost 20% faster.

Here’s how it works.

Option One: Use a Balance Transfer (or Multiple Balance Transfers)


If you trust yourself to open a new credit card but not spend on it, consider a balance transfer. You may be able to cut your rate with a long 0% intro APR. You need to have a good credit score, and you might not get approved for the full amount that you want to transfer.

Your own bank might not give you a lower rate (or only drop it by a few percent), but there are lots of competing banks that may want to steal the business and give you a better rate.

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MagnifyMoney regularly surveys the market to find the best balance transfer credit cards. If you would like to see what other options exist, beyond Chase and Discover, you can start there.

promo-balancetransfer-halfIt also has tips to make sure you do a balance transfer safely. If you follow them you’ll save thousands on your debt by remaining disciplined.

You might be scared of a balance transfer, but there is no faster way to cut your interest payments than taking advantage of the best 0% or low interest deals banks are offering.

Thanks to recent laws, balance transfers aren’t as sneaky as they used to be, and friendlier for helping you cut your debt.

Sometimes the first bank you deal with won’t give you a big enough credit line to handle all your credit card debt. Maybe you’ll get a $5,000 credit line for a 0% deal, but have $10,000 in debt. That’s okay. In that case, apply for the next best balance transfer deal you see. MagnifyMoney’s list of deals makes it easy to sort them.

Banks are okay with you shopping around for more than one deal.

Option Two: Personal Loan

If you never want to see another credit card again, you should consider a personal loan. You can get prequalified at multiple lenders without hurting your credit score, and find the best deal to pay off your debt faster.

Personal loan interest rates are often about 10-20%, but can sometimes be as low as 5-6% if you have very good credit.

Moving from 18% interest on a credit card to 10% on a personal loan is a good deal for you. You’ll also get one set monthly payment, and pay off the whole thing in 3 to 5 years.

Sometimes this may mean a higher monthly payment than you’re used to, but you’re better off putting your cash toward a higher payment with a lower rate.

And you’ll get out of debt months or years faster by leaving more money to pay down the debt itself. If you want to shop for a personal loan, we recommend starting at LendingTree. With a single online form, dozens of lenders will compete for your business. Only a soft credit pull is completed, so your credit score will not be harmed. People with excellent scores can see low APRs (sometimes below 6%). And people with less than perfect scores still have a good chance of finding a lender to approve them.

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If you don’t want to shop at LendingTree, you can see our list of the best personal loans here.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Brian Karimzad
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Brian Karimzad is a writer at MagnifyMoney. You can email Brian at brian@magnifymoney.com

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Does Debt Snowflake Actually Work?

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

debt avalanche vs. debt snowball

Two of the most popular debt payoff strategies are debt snowball and debt avalanche. Debt snowball, popularized by Dave Ramsey, involves paying off your debts from the smallest to the largest balance. Debt avalanche involves paying off your debts from highest to lowest interest rate.

There’s another winter-related strategy you might want to consider if you’re looking to repay significant debt: debt snowflake. Ideally, this strategy should be used in conjunction with either of the above methods. It helps you save small, snowflake-sized amounts of money each day or week to put toward your debt.

Read on for everything you need to know about the debt snowflake strategy.

How the debt snowflake strategy works


The debt snowflake strategy involves saving in little ways each day and then putting those small savings toward your debt. Ideally, debt snowflake shouldn’t be used by itself, but rather with another debt repayment strategy.

Priya Malani, founding partner of Stash Wealth, a financial planning company, said she wouldn’t call debt snowflake a “method,” per se. “I would think of it more as a bonus or add-on strategy that works in conjunction with one of the main methods of debt paydown, [like the] snowball or avalanche,” she said.

So how does it work? It’s quite simple. Let’s say you bring your lunch one day instead of spending $8 on a salad. You can put that $8 toward your debt immediately by making a small payment online. Or you can keep track of your “snowflakes” and put them toward your debt at the end of the month.

There are many areas you can reassess in your daily life to find small savings. Consider the following ways to cut back:

  • Cancel old subscriptions. Malani said this can include everything from magazine and music subscriptions (like Spotify) to gym memberships and movie/TV subscriptions (like Hulu).
  • Sell old clothing and goods online. If you have old clothing, shoes or accessories sitting in your closet, consider selling them on Poshmark, eBay or through a Facebook buy/sell/trade group.
  • If you’re going out, do it during happy hour. Instead of spending $13 on a craft cocktail, find a bar that sells one for $6 as part of a happy hour special, Malani recommends.
  • Take uberPOOLS or Express POOLS whenever you can. UberPOOLS are significantly cheaper than normal Ubers, and Express Pools can be up to 50% cheaper than uberPOOLS. Malani also recommends taking public transportation whenever you can.
  • Skip the morning latte. Beverly Harzog, author of “The Debt Escape Plan,” said just because you’re budgeting with the snowflake strategy doesn’t mean you need to skip your latte every day. Instead of getting one six days a week, opt for once a week instead.
  • Skip convenience items at the grocery store. Pre-washed, pre-cut lettuce is going to run you a lot more than a head of iceberg, Harzog said. Skip convenience items such as this when shopping for your weekly groceries.
  • Have a low-key night at home. A night out with friends could run you $100 or even $200. Malani recommends having everyone over for a wine night or potluck instead to save a little cash.
  • Opt for cheaper entertainment. Instead of going to the movies or catching a live show every weekend, consider renting a movie and eating something at home. Just remember: That doesn’t mean you have to become a hermit. “Maybe go to a movie once a month instead of four times a month,” Harzog said.

Debt snowflake: Pros and cons

The debt snowflake strategy isn’t for everyone. Below, we’ve identified the top three pros and cons associated with the strategy.

Pros

  • It’s an easy way to make small changes. Some debt repayment strategies require quite a bit of planning, but the snowflake strategy is fairly simply. All you have to do is save $2, $5 or $10 every so often, and there isn’t much more to it.
  • There’s a psychological perk. Many people benefit from the small “wins” associated with the debt snowball method. The snowflake has a similar benefit. “The snowflake strategy reminds you that you are in control of decreasing your debt balance, which has great psychological benefits that help keep you motivated and empowered with your financial life,” Malani said.
  • It makes you more aware of your spending. It’s easy to get stuck in a pattern of less-than-stellar spending habits without realizing their damage. For example, a $4 latte each weekday might not seem like a lot until you realize that skipping it could save you about $100 a month. “I think [the debt snowflake] makes people stop and think about what they’re doing every single day,” Harzog said.

Cons

  • It requires serious organization. If you opt for the debt snowflake strategy, you have to make sure you’re organized. This means either grabbing your cellphone and making a transfer the minute you save money or keeping a list of all your savings to put toward your debt at the end of the month. Harzog recommends staying organized by setting up email or phone reminders to ensure you make your payments.
  • It doesn’t work well as a stand-alone strategy. Some people want a simple, streamlined solution for paying off their debt. If you’re concerned about balancing too many things, debt snowflake might not be for you, as it works best with another strategy such as debt snowball or debt avalanche.
  • You might lose motivation. The savings associated with the debt snowflake strategy are small. Malani said if you struggle to find these small savings, you might feel defeated and could lose your motivation to stay on track.

Debt snowflake makes a difference: Here’s how

Saving $5 here or $7 there might not seem like it will make a difference in your debt, especially if you have a large balance. But it does.

Let’s say you have $5,000 in credit card debt with a 15% interest rate and a minimum monthly payment of $100. You normally pay $200 per month toward your debt but are able to put an extra $100 toward it by using the snowflake strategy to cut out weekly lattes and other small expenses. Here’s how much of a difference that extra $100 a month can make:

StrategyTotal DebtMinimum PaymentMonthly PaymentInterest RateTime to Pay Off Debt Total Interest Paid
No snowflake$5,000$100$20015%31 months$1,033
Snowflake$5,000$100$30015%19 months$642

3 other debt repayment strategies to consider

Perhaps the debt snowflake, debt snowball and debt avalanche methods aren’t for you. Luckily, there are myriad ways to pay off debt. Below are three other strategies to consider.

Debt consolidation loan. One common way to pay off debt is through a debt consolidation loan. This involves combining all your debt and taking out a personal loan that will go toward the debt as one monthly payment.

Interest rates on debt consolidation loans are typically lower than interest rates on credit cards.

Balance transfer credit card. If your debt is credit card-related, you might want to consider a balance transfer credit card. These cards typically have introductory rates as low as 0%, which can allow you to repay your debt while saving on interest.

This strategy is only worthwhile if you’re certain you can repay your debt within the introductory rate grace period since the rate after that could be just as high or even higher than your previous rate.

Debt management. If you hold a significant amount of debt and have struggled for years to pay it off, you might benefit from credit counseling. Consider meeting with a nonprofit credit counselor who could help you come up with a debt management plan.

Besides helping you stay on track with a debt management plan, nonprofit credit counselors can teach you about good financial habits that help avoid getting into debt again.

Whichever strategy you choose doesn’t matter as long as you’re committed to becoming debt-free.

“The right method is the one that works for you — the one that keeps you motivated and going — because everyone has different personal circumstances,” Harzog said. “You have to be very honest with yourself. Take a close look at your budget and your cash flow, and just see what you can do and pick the right method for yourself.”

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Jamie Friedlander
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Jamie Friedlander is a writer at MagnifyMoney. You can email Jamie here

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How to Manage Debt as a Single Parent in 2019

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

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When student loan deferment ended for Samantha Gregory, a single mom and founder of site Rich Single Momma, she had one reaction to her payments: sticker shock. “The amount they were asking for was so astronomical, it was bananas,” she said.

As a single mom in debt, these high payments were added to the already steep financial demands of covering household expenses and supporting her children, including one with special needs — all on one income.

Adding debt to the significant challenges of single parenting “puts a strain on not just your finances, but your emotions, your mental health,” she said. “It’s like, ‘I have this burden over my head so how am I going to take care of it and take care of my family?’”

It’s a question any single parent in debt may find themselves asking. There’s no one right answer, but the good news is that there are smart steps a single mom or dad can use to tackle debt. Here are some tested and certified strategies for how to manage debt as a single parent.

8 strategies for a single parent in debt

1. Keep debt on your radar

A key to managing money as a single parent in debt is to keep an eye on what you owe. Gregory warned against letting debt slip in your money management juggling act. “I know for me in the past, I’ve tried to ignore it and hope it would go away,” she said. “But it doesn’t go away. It’s still there, lingering.”

Keep your debts on your radar, so you’re not losing track of them, falling behind on payments or damaging your credit. If you don’t know what you owe, pull your free credit report and look up each outstanding debt you have and record the balance, interest rate, monthly payment and due date. Start a habit of reviewing these accounts regularly.

2. Work with your lender

Once you know what you owe, see if your lender offers any help or accommodations that can make this debt easier to manage.

You’ll have the most options for dealing with federal student loans, as servicers must provide you with options to forbear or defer payments, or switch to a different repayment plan.

Even for other types of debt, it can’t hurt to ask your lender if they’re willing to work with you. They might be open to giving you an extension on your payment, and some lenders will let you skip a payment now and tack it onto the end of your repayment period instead.

3. Claim benefits and support

Help isn’t always easy to come by as a single parent, so make sure you’re claiming the benefits and child support to which you’re entitled.

Federal assistance programs such as Women, Infants and Children (WIC), Supplemental Nutrition Assistance Program (SNAP) and school lunch programs can ease pressure on your budget while keeping everyone fed, for example. Other programs can assist with fixed monthly costs such as housing, child care or health insurance. Many state and local programs can offer additional help.

Single parents should also consider filing for child support. If you’re already entitled to such payments but the other parent isn’t paying, or you feel it’s not enough, consider pursuing legal steps to get adequate support for your family.

4. Revisit your budget

As a single parent with debt, living within your means is the foundation of your financial security. Review your budget to see if there are areas you’re wasting money on things you don’t need or use, whether it’s a neglected gym membership or a house you’re realizing is roomier than necessary. Consider lifestyle changes and sacrifices — big or small — that you could make to lower your monthly costs.

Look for ways to free up some of the mental space you’re using for your money, too, Gregory suggested. She likes to automate payments, for example, to ensure they’re going out on time with less effort on her part.

5. Sell your extra time and stuff

To the single mom in debt, Gregory suggested looking for ways to generate some extra cash. “I’m a firm believer in side hustles,” she said. “There are so many options out there available to create a side hustle, start a business or just get another part-time job or work-from-home job.”

Then, “look around your house and if you have something valuable you can sell, sell it,” she said. Doing so can bring a fast cash infusion that can help you stay current on debt payments, or even make an extra payment.

It can be a tough and even emotional to sell some belongings, Gregory acknowledged. But, “It’s just things and they’re replaceable, whereas your peace of mind, your family and kids, and your health are not replaceable,” she said.

6. Make extra debt payments

If you can carve out extra savings, that’s money you can use to pay off your debts faster. One method to do so is the debt snowball:

  • Figure out how much more of your monthly income you can afford to devote to making extra debt payments. Include this as a line item in your budget.
  • Put that extra cash toward your debt with the lowest balance, and make the minimum payment on all of your other debts.
  • Watch the balance on your high-priority debt decrease faster.
  • Once your first debt is gone, “roll over” the funds budgeted for your monthly payment and the extra payment and apply them to the next low-balance debt.

Making extra debt payments will lower your principal faster which will, in turn, lower your interest costs. As a result, this strategy could avoid hundreds of dollars in interest and shave months or even years off your debt repayment.

7. Consider debt consolidation

For a single parent, debt consolidation can be another way to get ahead. Consolidating debt makes the most sense when doing so will lower the interest rates you’re paying.

A credit card balance transfer is one way to accomplish this. You can open a credit card with a 0% introductory rate. Then, transfer existing balances to this new credit card (note that this will often incur a balance transfer fee) and you can repay this debt interest-free.

If you have higher debt balances or prefer a fixed repayment plan, a personal loan could be the way to consolidate debt. To do so, you can take out a new personal loan with the rates, term or payments you would prefer and use the loan funds to pay off and replace existing debts. You can compare various lenders with our debt consolidation comparison page to get an idea of the terms and rates for which you could qualify.

8. Tap your community for support

Managing debt as a single parent can be hard on you because, at the end of the day, paying them comes down to you alone. “In the back of your mind, you’re thinking ‘There’s no one who can help me with this,’” Gregory said.

However, you don’t have to go it alone — there are often people who are ready and willing to help as close as your own backyard. So let them! Family and friends can help you out in a variety of ways, from spotting you cash in a tight month to helping with child care. You can also get assistance from your church, community and local nonprofits or programs.

Even if you don’t always find the help you need right away, asking around can start you on the track to getting the recommendation or referral that leads you there. Gregory also suggested online communities, such as local or single-parent Facebook groups, as a way to crowdsource solutions and get connected with helpful resources.

Pass your debt and money lessons on to your kids

Debt can be a big regret for many single parents. “If I had more information when I was going to college, I wouldn’t have taken out so many loans,” Gregory said.

But these ideas for how to manage debt as a single parent can help you push past regret into action. In doing so, you’ll be creating the financial security that your kids need, all while modeling what good money and debt management look like in action.

Gregory, for example, used her experience with student debt to warn her daughter away from borrowing to pay for college. As a result, “She’s really blessed that she doesn’t have to take out student loans, so she won’t be saddled with that big debt when she graduates from college,” she said.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Elyssa Kirkham
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Elyssa Kirkham is a writer at MagnifyMoney. You can email Elyssa here

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