Debt can present real pressure, it can impact your everyday life in numerous ways, it can effect your relationships, your ability to enjoy your life and probably most importantly it can effect your health.In an Ideal world, no one would require credit – either credit cards or loans. We’d pay for everything in cash. Our grandparents didn’t want or need credit. If they couldn’t afford something, they simply wouldn’t buy it.Of course things are a lot different today and the ‘Credit Crunch’ we are winessing is a direct result of all the easily available credit. If you owe money, on a credit card or a loan, you may be wondering if you can ever be debt free.There is a method of paying off your credit card and loan debts which is gaining currency and helping many to become debt free. This method is called the ‘Debt Snowball’. Numerous experts in finance have endorsed this method and for many people struggling with mounting debt it’s been the solution.How Does The Debt Snowball Method Work?The Debt Snowball is a process in which you pay of the credit card or loan which has the highest interest rate first. First of all you make a list of your credit cards and/or loans, ranked from highest to lowest interest rate. You then need to look at your monthly finances to pinpoint how much money you can set aside for repaying these debts.For example let’s say that you have four debts, a mixture of credit cards and loans. The highest interest rate amount would be listed first and so on in descending order to the lowest.Next, you take the money you’ve set aside in your monthly budget and use this to pay off as much as possible of the debt with the highest interest rate. This must be more than the minimum payments. For the other debts, make only the minimum payments.Continue making these payments until the first debt on your list is paid off and then move on to the debt with the second highest interest rate. Keep paying off the second debt using the same method.Just keep on working down your debt list and paying off each credit card or loan using the same method. With each credit card or loan you pay off, the amount you’ll be able to afford to pay off the next increases. If you keep setting aside that extra money in your monthly budget to repay your debts, you’ll be able to get out of debt fairly quick.So why pay off the highest interest card or loan first? You’ll save more money this way – the higher the interest rate, the quicker your debt will grow.You Can Be Debt FreeThe Debt Snowball method has been used by many people to become debt free and take control of their lives again. It isn’t necessarily easy; it will take some dedication and a little sacrifice to make this method work for you.By committing to pay off your debts, you’ll find that your mental strain will also begin to lighten. Once you pay off your debts, cut up and cancel all but one of your credit cards. Keep this one to use for emergencies only and for times wen no other payment method is available. Now congratulate yourself on a job well done and then start enjoying your new, debt free life!Another More Cost Effective Debt Reduction MethodYour other best debt reduction method is debt consolidation with a low interest loan. Total up all the debts you have, obtain a single low rate loan for this amount and settle all of your debts in one go by paying them off with your new loan.With the Debt Snowball method all your debts other than the one you are attempting to pay off are ignored, to a degree as you only pay the minimum repayment each month, and they continue to cost you money, usually at a higher rate of interest than your typical debt consolidation loan.By utilising a debt consolidation loan you’re left with one easy to manage lower rate payment per month. This also takes away the subconscious pressure of having multiple debts as well as saving you money.By using this method you also avoid the higher repayments costs of higher interest credit cards and loans. Debt consolidation is a very cost effective method of becoming debt free.