U.S. credit card balances reached $1.25 trillion by the end of the first quarter of 2026, after a seasonal $25 billion decline from the prior quarter, leaving millions of borrowers searching for a repayment plan that holds up over the long haul.
George Kamel, a personal finance expert and co-host of The Ramsey Show at Ramsey Solutions, thinks that feeling of paralysis is the real problem.
Most people stay trapped in debt not because they lack financial literacy but because they lose motivation long before the strategy pays off, Kamel said.
His preferred approach is a repayment method called the debt snowball, which ignores interest rates entirely and prioritizes building psychological momentum over mathematical optimization.
Kamel used the snowball method to pay off his consumer debt early in his career, according to Ramsey Solutions.
Kamel’s “snowball” method targets the smallest balance first
The “debt snowball” is built around four sequential steps, all of which rank balance size above interest cost when deciding which obligation to attack first.
Borrowers start by listing every non-mortgage debt from smallest outstanding balance to largest, completely disregarding the interest rate attached to each account, Kamel explained in a Ramsey Solutions guide.
They continue making minimum payments on every balance except the smallest one, directing all remaining monthly cash flow toward that single obligation until it is gone.
Once that first balance reaches zero, the full monthly amount that had been going toward it rolls over to the next-smallest debt.
Research supports a behavior-first approach to debt repayment
The debt avalanche, which orders debts by interest rate from highest to lowest, can save more money on paper, Kamel openly acknowledges.
However, Bankrate’s 2026 Credit Card Debt Report suggests the math-first approach rarely survives contact with real life. The survey of 2,564 U.S. adults found that most credit card debtors have no structured plan to eliminate their balances.
Ted Rossman, senior industry analyst at Bankrate, called the lack of planning ‘alarming but not surprising,’ adding that most credit card debtors have no roadmap out of revolving balances.
Americans have trouble talking or even thinking about credit card debt. We need to take the stigma out of it. If you have credit card debt, you have plenty of company, and the causes are usually practical. But you can’t hide from it, especially since credit card balances and rates are near record highs
More than a quarter feel less confident about getting out of debt than a year earlier, and nearly one in five worry they may not be able to make minimum payments within the next six months.
A separate Bankrate survey from 2025 found that nearly two in three credit card debtors have delayed or avoided major financial decisions because of their outstanding balances, including saving for emergencies, investing, and buying a vehicle.
Those findings align with the Ramsey Solutions philosophy, which Kamel echoes, that personal finance is 80% behavior and only 20% head knowledge, a philosophy that founder Dave Ramsey has long argued.
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American household debt reached $18.8 trillion as borrowers shared their stories
Total household debt rose to $18.8 trillion by the end of the first quarter of 2026, the Federal Reserve Bank of New York reported in its quarterly household debt and credit survey.
Credit card balances stood at $1.25 trillion during the same period, and student loan delinquency climbed to 10.3%, the New York Fed indicated.
Protect Borrowers’ (formerly the Student Borrower Protection Center) analysis of the same data found that overall credit card delinquency had reached its highest level in 16 years and that auto loan delinquency had hit the highest rate the New York Fed has ever recorded.
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Kamel has highlighted those trends in his own programming, including a video filmed at Disney Springs where he asked visitors about their outstanding balances.
One woman disclosed an estimated $128,000 in non-mortgage debt, including roughly $100,000 in private student loans for a business administration degree, GOBankingRates reported.Â
Another tourist featured in the video carried about $35,000 in student loan debt and an additional $1,000 in credit card debt.
Kamel’s personal payoff story reinforces the behavioral case for the snowball
Kamel joined Ramsey Solutions as a temporary employee in 2013 while carrying $36,000 in student loans from the University of Mobile and $4,000 in credit card balances.
After completing the company’s Financial Peace University course, he applied the snowball method to his own accounts and cleared all $40,000 within 18 months.
He and his wife went on to pay off their mortgage entirely by 2021, moving from negative net worth to millionaire status in under a decade on an ordinary income.
Kamel warns that debt consolidation simply relocates the debt
While the snowball targets behavioral change, Kamel has been equally vocal about what he considers a widespread trap among borrowers seeking a quicker exit from debt.
Rolling multiple balances into a single new loan does not reduce the total principal a borrower owes, Kamel argued in a segment of his program.
The borrower still carries the same total amount of debt under a different lender, often with origination fees and credit check charges that can increase the overall load, GOBankingRates reported.
Borrowers are not guaranteed a lower interest rate either, which undercuts the central premise that a consolidation loan will save money over the repayment period.
Ramit Sethi, a best-selling personal finance author, has expressed a similar concern about the gap between consolidation’s promise and its actual effect on balances owed.
Many borrowers mistakenly believe that consolidation reduces the total they owe when it merely restructures the same obligation under different repayment terms, Sethi noted.
Related: Bank of America offers critical debt elimination plan