The debt payoff strategies that work and the ones that can backfire

Getting out of debt is top of mind for too many Americans these days. According to the Federal Reserve’s Survey of Consumer Finances, the share of American families behind on loan payments at the end of 2025 jumped from 12% in the previous period to nearly 20%, and those behind on the bills by two months or more hit over 8%, up from 5% in 2022.To complicate things further, the price of borrowing money keeps going up.The cost of a mortgage has gone up from 6% in February to 7.4% at the beginning of October, according to Freddie Mac, and the price of gas is 34% higher than a year ago.For Americans juggling credit card balances, personal loans and other consumer debts, interest charges can consume money that would otherwise go toward savings or household expenses.

And when payments barely cover the interest, borrowers can spend years paying down balances with little progress.Fortunately, there are several ways to accelerate debt repayment.Some rely on simple calculations and changes in spending habits.

Others involve taking out new loans, transferring balances or hiring companies that promise to negotiate with creditors.But be careful not to fall into a debt payoff mistake.

(Find out more below!)The debt avalanche and snowball methods are best for folks who can’t seem to pay down revolving debt like credit cards, even though they have good income.For these folks, instituting a method that brings some discipline to paying down debt works wonders.The debt avalanche method prioritizes paying off debts with the highest interest rates, regardless of their balances.

Its objective is to minimize the amount of interest borrowers pay while eliminating their outstanding debts.The process is simple: You create a spreadsheet with all your debts.List them in descending order by annual percentage rate (APR), which is a way of looking at the most expensive ones at the top.

Then tackle the most expensive loans first. To do this, you make the required minimum payments on eve...