Hello and welcome to Financial Face-off, a MarketWatch column that helps you weigh financial decisions. Our columnist will give her verdict. Tell us whether you think she’s right in the comments. We want to hear from you. Share your suggestions for future Financial Face-off columns by emailing our columnist at [email protected]. The face-off It’s a new year and a new you. If you’re carrying a credit-card balance or other unsecured debt, you may have decided that now is a good time to start the journey toward becoming debt-free. There are two popular methods for getting rid of debt: the debt snowball and the debt avalanche.
The snowball targets your lowest-balance debts first. With this method you pay the minimum on all of your debts, and put extra money toward the lowest-balance debt until it’s paid off. Then you cross it off the list and put even more extra money (because you’ve eliminated a debt payment) toward the next lowest balance. The avalanche tackles the debt with the highest interest rate first, regardless of balance size. You use the same pay-off method, but focus first on the most expensive debt. So what makes more sense for people trying to get out of debt: the ava …