First, the complete inventory
Nobody gets out of a debt they do not know. Before choosing a method, list every debt: who you owe, the current balance, the interest rate, the minimum payment and the statement date. Include credit cards, personal loans, the car loan, buy-now-pay-later plans and what you owe to family.
This step is usually the most uncomfortable and, at the same time, the most relieving: once everything sits in one list, the problem stops being a cloud and becomes a number with an end date.
Snowball: pay off the smallest debt first
With the snowball you pay the minimum on every debt and put every extra dollar toward the one with the smallest balance, regardless of its rate. When you clear it, the payment you were making rolls into the next smallest debt, and so on until the last one.
Its advantage is psychological: closing a debt within a few weeks gives you a quick win and keeps you motivated. It is the recommended method if you have many small debts or if you have abandoned payoff plans halfway in the past.
Avalanche: attack the highest rate first
With the avalanche you also pay the minimums, but the extra money goes to the debt with the highest interest rate, usually a credit card. By eliminating the most expensive interest first, you pay less in total and, in most cases, finish sooner.
It is the method that saves the most money, but it demands patience: the first debt to fall may be the largest. Choose avalanche if your debts have very different rates and if the final number motivates you more than the speed of the first win.
How you do it with Amy
In Amy you enter each debt with its balance, rate and payment, choose snowball or avalanche, and the app shows the suggested payment order and the estimated date you will be done. Every payment you log, by chat or by voice, updates the plan and the payoff date.
The "My statement" section explains the minimum payment, the interest and the dates of your credit card so you never pay only the minimum without knowing it, and reminders arrive before each statement date.
Step by step
List every debt with balance, rate and payment
If you do not know the rate, ask the bank or check the statement. It is the number that decides the method.
Define how much extra you can pay each paycheck
A fixed amount, however small, taken from your paycheck budget before variable spending.
Choose snowball or avalanche
Snowball if you need quick wins; avalanche if you want to pay less interest overall.
Automate the minimums and schedule the extra payment
No minimum should depend on your memory. The extra payment always goes to the priority debt.
Review progress every week
See how much the balance dropped and how much the payoff date moved. Watching it get closer is what keeps you on the plan.
Frequently asked questions
Should I save while paying off debt?
Keep a minimum cushion for emergencies, for example one paycheck's worth of fixed bills, and send the rest of your surplus to the debts. Without that cushion, any surprise goes back on the card.
Is it worth consolidating debts into one loan?
Only if the new rate is clearly lower than your current ones and you do not use the freed-up cards again. Consolidating without changing habits usually ends in more debt.
What if I cannot make the extra payment one paycheck?
Pay the minimums, note the reason and resume on the next one. A plan that allows pauses survives; a perfect plan is abandoned at the first slip.
