Creating a 'Get Out of Debt' Snowball

Most people think that the best way to get out of debt is to make a list of all your debt, rank it by highest interest rate, and then begin making extra payments to the highest interest card.  Then once the highest one's paid off, take the amount used to pay off the highest rate card and apply that to the next highest amount due.

While in theory this makes sense because you're attacking your highest interest rate cards first, according to Dave Ramsey, America's leading personal finance expert, you should start with the lowest amount due first.

This helps build up momentum and instead of getting overwhelmed with the feeling you'll NEVER get out of debt, by attacking the smallest amounts first, you can actually SEE progress.  This in turn gets you excited and motivated to continue making payments to rid yourself of your debt load.

Of course you need to keep making the minimum payments on all your other cards or debts, but as you pay one off, you simply take the amount you were paying and apply it to the next smallest amount.

Be sure to read Dave's complete recommendation on this version of the debt snowball.