Debt: n – a liability or obligation to pay or render something and/or the condition of being under such an obligation.

Example: We went into debt paying medical bills.

The term debt is often taken as negative in connotation and most people would agree that owing on a debt or being in debt is not a good thing. Yet, many people are “in debt” for various things like credit cards, student loans, mortgages, car loans, etc. Most would also agree that some of these are looked at as being more “good” or acceptable than others, like a mortgage.

In contrast, if you say, “I have credit card debt,” most people cringe. Heck, I cringe knowing I have some myself. It’s a debt that one usually wants to obliterate sooner than later.

So how can you tackle credit card debt without developing an ulcer at the same time? Get organized and prioritize!

There are a few methods out there that can help prioritize how you pay off your debt:

  1. The Snowball Method – Coined by Dave Ramsey, this method works on paying off one debt at a time (either highest interest card or lowest balance card)  while paying the minimum on the other cards. For example, if you owe $700 on card 1, $1,200 on card 2, and $3,500 on card 3, it might make more sense to pay off the $700 card quicker while making minimum payments on the other two. The goal is to feel successful and keep going until you’ve accomplished paying off all of your credit card debt.
  2. The Gazelle Intense/Debt Snowflake Method – Used by Mom’s Plans, this method takes any extra income or unexpected money you receive and immediately puts it towards debt with the idea to get debt paid off faster, before you have the time to spend that extra income! Don’t let that cash gift sit in your bank account for days (it will get spent!), instead, immediately apply it towards a debt you’re paying off.
  3. Double Up Method – Okay, so I’m coining my own term, but I can’t take credit for the idea: make more than one payment a month on your debt. For instance, if you pay $75 on the 1st of the month to a credit card, make another $25 payment around the 2nd or 3rd week of the month. The idea here is to reduce the total amount of interest charged on your card while making extra payments. The more payments you can make like this, the quicker the balance will drop and the amount of interest you pay on the card is reduced over time.

The key to using any of these methods, however, is to be detail-oriented and tally up all debt totals, then prioritize which you want or need to pay first; higher interest, bigger balance, or most stressful to live with. Every month, keep track of your progress and don’t give up if you’re not moving as quickly as you’d like or have a set back. It happens to the best of us!

If you need more inspiration, motivation, or a kick in the pants, check out The Debt Movement.

Have you used any of these methods to pay off a debt or debts? What worked for you?

3 Comments

  1. I like all of these methods. Snowballing the debt is helpful because little amounts can add up quickly!

  2. Money Beagle Reply

    As an aside, one thing that has to be mentioned in any sort of article with debt payment strategy is the need to avoid taking on new debt during the payoff process. This seems obvious on first glance, but in practice, how many times to do you see someone pay off a debt, then go right out and replace it with a new debt? Unfortunately, it happens way too much, so it’s worth stating 🙂

  3. Dividend investing Martin Reply

    I am glad seeing that I do all three methods combined sort of together. I try to focus on the lowest debt first (I think it’s called an avalanche method), pay extra money towards and try to double it or whatever you call it. But still, the debt can be a great servant to you but a very rude Master if you handle it improperly and then paying it back can be a pain.

Write A Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.