Snowball founder and CEO Tanya Menendez offers practical advice for keeping calm and getting out from under high-interest debt

Por Tanya Menendez
Abril 29, 2019
Hispanic woman shopping online with credit card

Credit card debt can very easily get out of hand. The average amount of credit card debt owed by millennials is $4,868. The key here is to begin getting in control of the debt and creating a plan to get out of it. Take all of your high interest rate debt (e.g., credit card, medical, anything with 5% interest or more). Create a timeline to pay it down and try to lower your payments. Here we'll go over best practices in dealing with debt. If you want additional support, schedule a free intro call here, or check out the free Master Your Finances email course.

Credit Card Debt Best Practices

  1. Do not carry a balance on your credit card if you don't have to.
  2. High interest debt is anything with an interest rate above 5%.
  3. You should still contribute to your emergency fund if it is below 3 months' worth while paying off your debt.
  4. Get organized.
    • If you haven't already, find all of your accounts and how much you owe. The first step is getting organized. is a helpful tool to collect all of your accounts in one place.
  5. Anything is possible.
    • If you have a lot of debt and are feeling overwhelmed, begin by being kind to yourself and knowing that it's possible to get out of. There are people with more or less debt than you. It's helpful to get into the mindset that you want to get out of it.
  6. Make a plan. There are a lot of options to consider:
    • You can negotiate with the credit card company if your account is delinquent. (This negatively impacts your credit score, but might be worth it in the short term.)
    • You can take out a 0% APR card and transfer the balance if you can pay it off in 18 months, this can help you take some of the stress off.
    • You can take out a personal loan if they are offering you a low amount.
  7. Create a weekly appointment with yourself to look at your debt and try to take one action per week (or more if you can!).

When Does a Balance Transfer Make Sense?

– You have decent credit.

– You are able to curb your spending and can commit to paying it off before the introductory period ends.

– You can get approved for it ?

How a Balance Transfer Works

In a balance transfer, you transfer debt from one credit card to another.

Step 1. Open a new credit card with a 0% APR introductory rate. Try to get a credit card with a decent time period for the rate, it's usually 12 to18 months.

Step 2. Follow the instructions to transfer the debt from one card to another. You can usually do this online or over the phone. Doing it on the phone is nice because you can ask questions.

Step 3. Your new credit card will pay off your old credit card debt and then transfer the balance to your new credit card.

PRO TIP Some cards have a time limit for balance transfers, for example, it's only 0% APR if you transfer within 30 days.

Step 4. You will start paying off the new credit card. Make sure you pay it off before the introductory rate is over! That's the only way you win over the credit card companies.

For example, if you have a balance of $7,500 on your current credit card with a 20% APR, you might be able to transfer that balance to a new credit card with a 0% APR (on new purchases and your balance transfer) and no transfer fee for the first 12 months. After the 12 month period, the APR for your new card will go up to 20% APR but you will have paid off that debt and not incurred additional interest.

Disclaimer: The information provided is for informational purposes only, to assist you in managing your own finances and decision-making. Snowball Wealth is not a financial advisor, investment advisor, financial planner, fiduciary, broker, bank or tax advisor. Accordingly, before making any final decisions or implementing any financial strategy, you should consider obtaining additional information and advice from your accountant or other financial advisors who are fully aware of your individual circumstances