2026 Debt Management Lazy Pack: How to choose Snowball vs. Avalanche, integrated loan calculation and hemorrhage process

Includes all debts owed on credit cards, student loans, car loans, mortgages, personal loans, etc. Record the balance, interest rate, and minimum monthly payment for each debt

"Good debts" are those that can bring long-term value (such as mortgages, education loans), while "bad debts" are consumer debt with high interest rates (such as credit card recurring interest)

Total monthly payment divided by monthly income. If it exceeds 40%, your debt burden is already too heavy and needs to be actively dealt with

Fixed interest rates do not change, while floating interest rates fluctuate with the market. Prioritize debt with high floating interest rates

Arrange all debts from smallest to largest balance. After paying the minimum payment on all debts, put all the remaining funds into the smallest debt, and then move on to the next debt after paying it off.

Arrange all your debts from highest to lowest interest rate. After paying the minimum payment on all debts, put all the remaining funds into the debt with the highest interest rate, and then move on to the next debt after paying it off.

If you have a small high-interest debt, pay it off first (combine the advantages of snowball and avalanche)

Consolidate multiple high-interest debts into one low-interest loan. Simplify repayment management and reduce total interest expenses

Transfer high-interest credit card balances to credit cards that offer low or zero-interest promotional periods. Be aware of transfer fees and promotional deadlines

Proactively contact your lender to inquire about the possibility of lowering your interest rate or adjusting your repayment terms. Especially if you have a good repayment record

If your credit score improves or market interest rates decrease, reapply for a lower-interest loan to replace existing high-interest debt

Even if you pay a little more each month, you can significantly shorten the repayment period and reduce interest expenses in the long run.

Stop using your credit card to spend money during the debt repayment period, or at least only spend what you can pay off in full that month. Consider temporarily switching to cash payments

If you only pay the minimum payment, a debt of 10,000 yuan may take more than 10 years to pay off at an interest rate of 20%, and the total interest will far exceed the principal.

Credit cards are actually interest-free if the bill is paid in full before the due date. Revolving interest will only accrue if the amount is not paid in full.

It’s easy to lose track of your credit cards if you have too many. Keeping 1-2 major credit cards is enough

With an emergency reserve, you don't need to borrow money when you encounter unexpected expenses. Aim for 3-6 months of living expenses

Track your income and expenses to make sure you don’t spend more than you earn. Use 50/30/20 or other budget allocation rules

Wait 48-72 hours before making a large purchase. Ask yourself: Do I need it? Can I afford it? Is there a cheaper alternative?

After paying off the debt, transfer the original repayment amount into savings and investment, and maintain the same "payment" habit

Review your finances monthly to make sure no new debt is accumulating

There are non-profit debt counseling agencies in many countries that provide free financial counseling and debt management programs

Negotiate with creditors through a consulting agency to develop a feasible repayment plan and possibly obtain interest rate relief

Negotiate directly with creditors to reduce principal or interest rates, usually requiring proof of genuine repayment difficulties

Consider a part-time job, side hustle, or selling unwanted assets to speed up repayment while you're paying off debt

Bankruptcy or debt settlement is a last resort option and can severely impact your credit history. Only consider if all else fails

If the emergency reserve fund is insufficient during the debt repayment period, now is the time to make up for 3-6 months of living expenses.

Convert funds originally used to pay off debt into regular investments and let compound interest start working for you

Paying your bills on time, lowering your credit utilization ratio, and not closing your oldest credit accounts can all help improve your credit score

Down payment for a house, children’s education fund, pension, etc. With a debt-free foundation, these goals will be easier to achieve.

You have done what many people cannot do. Celebrate appropriately, but don’t go back to the old path of borrowing money to spend.

In 2026, CITIC, Yushan, and Taishin all have 0% compensation for 6 months, but please pay attention to the handling fee of 2-3%. Do not continue to swipe your card during the compensation period, otherwise one transaction will become two transactions

Those with a good credit rating (Lianzheng 700+) can get 4-7% in 2026, which is more than half the savings of 18% on credit cards. Don’t try it if the Lianzheng is below 600, otherwise your credit rating will be lowered.

Calculate "mortgage interest rate vs ETF annual return". If the mortgage rate is 2.5% and the ETF expectation is 7%, if the spare money is invested, the net profit gap will be different in 5 years. But make sure your emergency fund is sufficient

Don’t close your old card after paying off your credit card (it affects the length of your credit history). Maintain credit utilization ratio < 30% for best credit rating

Google Sheet or pen and paper will work. Fields: Creditor, Principal, Interest Rate, Minimum Monthly Payment, Number of Remaining Periods. Read it all in one page

Freeze at least 1-2 credit cards (can be frozen in the App, no physical clipper required). Avoid "repaying one payment after another"

Call the bank customer service: "I am willing to repay but I am under great pressure." Most banks have interest rate cuts or flexibility plans. Compare reimbursements from other banks simultaneously

Choose Snowball or Avalanche and execute according to the schedule every month. Each time you pay off a payment, add the minimum monthly payment of that payment to the next payment to accelerate the compound interest effect.