Three months into the year, the pressure of credit card debt is still being felt. And not only in Romania. According to data published by LendingTree, an American financial product comparison platform, US cardholders who did not pay their balances in full last year had an average debt of $7,886, the equivalent of over 37,000 lei.
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An increasingly discussed strategy among financial education specialists, however, could make the repayment process easier: the “snowball” method. The basic idea is that a small, quick success can keep you motivated in the long run.
In practice, the method is simpler than it seems. Let's say you have three credit cards with different debts. You put them in order, from the lowest payment amount to the highest.
Continue to pay the minimum required amount on all cards each month to avoid accruing penalties. Additionally, direct all the money you can save to the card with the least debt so you can close it as quickly as possible.
Once you've paid off your first card in full, don't lower your total monthly debt payment. Instead, the money you used for that card is added to the payment of the next card on the list. Thus, the amount you allocate to the second debt becomes larger than before, which helps you pay it off faster. Do the same until all debts are extinguished.
“Think of a snowball that, as you roll it, gets bigger and stronger,” explains Courtney Alev, Financial Education Specialist at Intuit Credit Karma, to Oprah Daily. “Pay off the first debt, then use the same amount for the next and continue the same steps until you pay them all off.”
The strength of this method is less about calculations and more about psychology. It's not the option that pays the lowest interest, as other strategies promise, but the one that helps you stay motivated along the way.
“Paying off debt isn't just a matter of numbers, it's also a matter of state of mind” says Tori Dunlap, founder of HerFirst100K and host of The Financial Feminist podcast. “We know what we're supposed to do, but often we're held back by shame, guilt, or the fear that we'll never finish.”
When you pay off your debts starting with the smallest, the first closed card shows you early that progress is real. And that gives you the confidence to move on. “This shift in perspective helps you stay consistent, and consistency beats any perfectly laid out plan on paper.” says Dunlap.
Financial education specialist Tiffany Aliche, known as “The Budgetnista”, compare paying off debt with exercise. “If I tell you that you have to run five kilometers today, you probably freak out. But if I suggest a ten-minute walk after dinner, it doesn't seem so difficult.” she explained. The same is true with debts. A small debt seems easier to manage than a large amount that discourages you from the start, she says. “And the moment you pay it off, you gain courage and it's easier for you to continue with the next one.”
However, the method does not suit everyone. “Snowballs” it is especially useful for those who feel overwhelmed by the debts they have from several cards or loans and don't know where to start. It works well when you have small outstanding amounts spread over several places: credit cards, bank installments or other personal loans.
“But if you have a debt with a very high interest rate — 25 or 30 percent — it may be wiser to pay it off first so you don't pay more than you have to. If the interest rates aren't that high, it's more important than having a perfect strategy to get started. And if a certain debt is keeping you up at night, you can start with that one, even if it's not the smallest one.” says Aliche.
“However, there is no one recipe that works for everyone,” explains Tori Dunlap. “The best method is the one you can stick with long term.”
How do you get started
Before implementing the method “snowball” there are a few steps that can help you get started organized.
1. Make a complete list of debts. Take a piece of paper and write down all the debts you have: for each card or loan – cross the remaining amount, the minimum monthly payment and the interest. It is not a comfortable exercise, but it is necessary. You can't solve a financial problem if you avoid looking clearly at the numbers.
2. Put money aside for contingencies. Ideally, you should have savings that cover three months of expenses, experts say. In practice, however, even a few hundred euros set aside in a separate account is a good start. Even a small reserve helps you deal with an emergency without going into debt again.
3. Analyze your monthly expenses. Take a close look at your monthly expenses and see where you can make adjustments. It can be subscriptions that you don't use, services that you could give up or daily expenses that add up to significant amounts. The money thus saved can be directed directly towards paying off debts.
4. Choose where to start. If you apply the method “snowball”start with the card that has the lowest payment amount. Direct a larger monthly amount to it, as much as your budget allows, and pay only the minimum mandatory payment on the other cards. “Be realistic and don't propose installments that blow your budget. Even small amounts paid consistently add up over time.” says Courtney Alev. There are also free online tools that can show you a rough estimate of how long you can get rid of each debt.
5. Automate payments. Schedule payments directly from the bank's app or online account so that installments are automatically paid when due. This way you reduce the risk of forgetting a payment and paying additional penalties or interest. “Automation helps you avoid delays and not lose progress,” explains Tiffany Aliche.
Keep going, even when it's more difficult
Tori Dunlap recommends a monthly financial review and writing down every debt paid. “When you see clearly that you have closed a chapter, it is easier to find the motivation to continue, even after the initial excitement dies down”she adds. Each closed card means a concrete step forward, whether it was a few hundred or a few thousand lei.
There is no one-size-fits-all solution to getting out of debt. The important thing is to have a realistic plan, track your progress and not lose sight of why you started. “The most important thing is to have a strategy, track your progress and stay focused on the end goal: a debt-free life and more financial security”says Courtney Alev.
With a clear plan and payments made on time, 2026 can be the year that debt begins to noticeably decrease, and with it, the stress at the end of each month.
