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By Carol Church 

If you or someone you know is carrying credit card debt, they’re far from alone. The Federal Reserve estimates at least half of U. S. cardholders don’t pay their bills in full monthly. Service members are far from immune to this issue. In fact, some research suggests that military members are more likely to have credit card debt (and more of it) than civilians.

For some, this issue may be relatively minor—a few hundred dollars that will get paid off within a month or two. For many others, however, the situation is much more serious. Just as millions are in debt, millions also suffer from bad credit ratings, affecting so many things about their lives and costing them even more money. For service members, debt can be a distraction while deployed and may even result in revocation of security clearance.

Of course, credit cards aren’t the only kind of debt that can cause problems. Car payments (especially those with high interest rates), medical bills, and student loans all also have the potential to become a problem. Many people have more than one type of overdue or problem debt.

Those in this situation may feel like they have no idea where to start with getting the situation under control. However, the first step is to begin thinking about a clear plan of action. There are many possible ways to begin digging out of debt; we’ll discuss some common strategies below.

The Snowball Method

One approach to beginning to eliminate debt is the so-called “snowball” method. With this technique, you “get the ball rolling” on eliminating debt by (of course) making sure to pay the minimum on all debts monthly, but otherwise concentrating all “extra” payment on ONE debt first: your smallest debt. You do this regardless of interest rate.

A man in the distance holding his arm out with a snowball in his hand in the foreground.

StockSnap/, CC0

The idea is to get this first debt erased quickly in order to enjoy the immense emotional and psychological satisfaction we feel when “zeroing out” a deb. Once the smallest debt is wiped out, you move on to the next smallest debt, and so on and so forth.

This approach to debt is appealing to many due to basic human nature. Getting rid of a debt can feel like a big accomplishment and can provide debtors with motivation to keep going—and as with many things, the key here is to keep going! However, from a dollars-and-sense financial point of view, the snowball method is, at its root, unsound. You will pay more in interest this way!

The Ladder Method

With the “ladder” method, you again make sure to always put at least the minimum payment towards each debt, but concentrate on the debt with the highest interest rate first, regardless of its relative size. Even if it takes years to pay this one off, that is where you pay extra, because that is the debt that is losing you the most money.

Some simple math demonstrates the common sense of this approach, if you think about it. It might feel good to pay off that annoying $1000 student loan with a 5% interest rate, but consider how little that loan “costs” you over the year compared to a $10,000 credit card debt with an 18% interest rate!

The “Kickstart” Method

With this method, you start off paying a small debt in full for the motivation value and then proceed to your highest-interest debt next for the financial “dollars and sense” value. If you’re losing motivation paying on a large, high-interest loan, you can temporarily “downshift” to paying off a small loan again for the emotional payoff, but then go back to the high-interest account.

The “Rising Tide Lifts All Boats” Method

In this method, debtors pay the minimum first, then divide whatever extra amount they have left for debt elimination pretty equally among all their debts. Typically not a particularly intentional strategy, this approach is nonetheless pretty common, and may make debtors feel like they are at least “making progress” on all their obligations.

Which One to Choose?

Many experts advise choosing a method based on knowledge of your own personality. Can you work well within the logic of the ladder? Will you need the emotional satisfaction of the snowball? Is the kickstart method a good compromise? Although those of us who work in finance may feel that the ladder (or at least the hybrid) is always better, be aware that real-life research on the matter suggests that the less mathematically valid snowball method may often work better for people in real life. In an experiment where people “worked” by playing games to “pay off” pretend debt and get real money, those who concentrated their efforts on the account with the smallest balances worked the hardest to “get it done.”

And it does appear that concentrating on one loan at a time, rather than spreading out payments, is often best. Researchers looking at credit card data from nearly 6000 customers found that those who concentrated on paying off one account at a time were more successful than those who distributed their payments equally over multiple accounts. This effect was stronger when the debtors paid off smaller loans first.

Whatever the plan, debtors should make it clear and easy to follow They will benefit from thinking carefully about the best approach, making a plan, and sticking to it.  Paying off debt is not easy, but it can be done.


Boyer, R. (2012). The ‘snowball’ approach to debt. Retrieved from

Trudel, R. (2016). Research: The Best Strategy for Paying Off Credit Card Debt. Retrieved from

Kettle, K.L.  Trudel, R., Blanchard, S. J., & Häubl, G. (2016). Repayment Concentration and Consumer Motivation to Get Out of Debt. Journal of Consumer Research, 43 (3), 460–477,