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For example, if you transfer $6,000 in credit card debt to a card offering 0% intro APR for 18 months, you could pay off the full amount by making $333 monthly payments with no added interest charges.
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In the example cited above, Ramsey would have me work diligently to pay off the lower debt of $1,500 first, and work my way up to paying off higher debts later. How Ramsey’s Snowball Method Works
Credit cards usually apply the whole payment during the current cycle. Once a debt is paid in full, add the old minimum payment (plus any extra amount available) from the first debt to the minimum payment on the second smallest debt, and apply the new sum to repaying the second smallest debt. Repeat until all debts are paid in full. [5] [6] [7]
Contrary to what you may think, in Ramsey’s view, the best way to pay off credit card debt isn’t to instantly attack it. First, Ramsey stresses, you need to build an emergency fund of just $1,000.
“Ramsey’s basic steps for paying off debt are in line with what I would generally recommend: Total all of your debts including credit cards, student loans and personal loans,” said Henry.