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Pay Off Debt With These 4 Proven Strategies

Pay Off Debt With These 4 Proven Strategies


As the cost of goods and services increases, so too does the average American’s debt. In fact, in the second quarter of 2022, total household debt increased by $312 billion to $16.15 trillion, with an increase of $46 billion in credit card balances alone.1  

Managing debt of any amount can feel intimidating, but paying it off is all about planning. Luckily, several debt repayment options are available for you to pick from, and the right choice for every style is out there. With the right tools, a solid strategy, and perseverance, you can get your debt under control.

Getting started

Looking at your current budget or expenses is always a good place to start. From there, you’ll be able to determine where you can cut back on extra costs and put more money toward your repayment plan. This exercise will also give you a good idea of how much you can afford to put toward your debts each month. When going over your budget, be sure that you can afford to cover at least the monthly minimums on all of your debts before picking a repayment plan that requires you to pay more toward any particular debts.

Once that’s done, pick the best debt repayment option for your budget, time frame, and personality. Each comes with its own perks, so any one of them will help you reach your ultimate goal — being debt free — in a smart way.

The Repayment Plan: Debt Avalanche

The Basics: With a debt avalanche approach, your goal will be to prioritize the debts that accrue the highest interest rates. To do that, you’ll need to start by taking stock of all your different debts in one spreadsheet or list and placing them in order from the highest interest rate to the lowest. The debt with the highest rate will be the debt that you work on paying down first. Once that’s done, you move on to the debt with the second-highest interest rate, and so on down the list until you get every debt paid off.

The Benefits: Paying off your high-interest debts first will likely save you the most money over the long haul.

The Repayment Plan: Debt Snowball

The Basics: Unlike the debt avalanche approach, a debt snowball repayment plan prioritizes your debts with the smallest amounts first. As you would with the debt avalanche strategy, you’ll start by organizing your debts, but this time you’ll be listing them in order from the smallest amount to the highest, regardless of interest rate. As you pay off each small debt, you move on to the larger ones, working your way up to the most expensive ones.

The Benefits: If you appreciate crossing things off your to-do list quickly, a debt snowball approach to debt repayment allows you to pay off smaller debts swiftly before moving on to the larger, time-consuming, and expensive ones. For some, small victories along the way provide motivation to get to the finish line.

The Repayment Plan: Refinancing

The Basics: Refinancing means replacing an existing debt with a new one, and in some cases, it can be quite beneficial. Start by researching your interest rates, then see whether any loans offer better terms. Be sure you understand the terms of your current debts, since some come with penalties for paying them off more quickly than the term limits. Also, double-check how much time you have left on your current debts. Refinancing to a lower-interest loan for a longer period of time might not save you any money if you’re close to repaying your original one.

The Benefits: Refinancing high-interest loans to a loan with a lower interest rate can save you significant money over the life of the loan.

The Repayment Plan: Debt Snowflake

The Basics: The debt snowflake approach can be used as a supplement to any larger debt repayment strategies. The concept is simple: Take any “found” money and apply it to your original debt repayment plan. This money might come from birthday gifts, work bonuses, unexpected rebates, or anything else where you suddenly find yourself with money you hadn’t counted on.

The Benefits: Adding the debt snowflake approach to your repayment plan allows you to optimize small cash surprises by putting them toward paying down your debts — and avoiding as much interest as possible — more quickly.

If your debt ever feels overwhelming, first, remember that you’re not alone, and second, that a little planning can go a long way.

Make debt repayment easier with Bill Pay2 and $300,3 with qualifying activities,4 from Total Access Checking, an account with free ATMs,5 no minimum monthly balance or monthly maintenance fees, and $100 to open. You can open online in minutes



1. Total Household Debt Surpasses $16 trillion in Q2 2022; Mortgage, Auto Loan, and Credit Card Balances Increase,”  Federal Reserve Bank of New York, August 02, 2022.

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3. Total Access Checking Bonus Information. Offer valid for accounts opened 2/1/2024 — 1/29/2025. Offer not available to existing or closed checking account customers of WTFC & its subsidiaries or employees. Limit 1 bonus payment per customer, regardless of number of accounts opened; may only be received from 1 WTFC location. Offer combinable with any WTFC savings offer. Bonus payment subject to IRS 1099-INT reporting & may be considered income for tax purposes.

4. Total Access Checking Bonus Qualifications. (i) Open new Total Access Checking account; (ii) mention offer during in-branch account opening, visit URL provided, or enter Echecking300 when applying online; (iii) have direct deposits totaling at least $500 per month made to the new account for 2 consecutive calendar months after the calendar month the new account was opened (‘Qualification Period’); & (iv) enroll in online banking & e-statements within the Qualification Period. Direct deposit is a payment made by a government agency, employer, or other third-party organization via electronic deposit, but does not include teller/ATM/mobile or remote deposits, wire transfers, digital banking/telephone transfers between accounts at WTFC, external transfers from accounts at other financial institutions, peer-to-peer network payments like Zelle or Venmo, or debit card transfers & deposits. New account must be open & have a balance greater than $0 to receive bonus payment. Balance determined as of end of each business day as funds currently in the account including deposits & withdrawals made in the business day. For eligible customers, bonus is deposited into the new account within 30 calendar days after the Qualification Period.

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