Forgot your password?

A Very Effective Way to Eliminate Your Credit Card Debt

By Edited Apr 29, 2016 0 0

Debt takes many forms; some people classify debt as good and bad, others as bad and better, yet others just see debt as debt.  I would like you to consider all debt but concentrate on credit card debt when reading this article.  The reason for concentrating on credit card debt is because the average credit card interest rate is around 15%.  Also the fact that the average American family carries about $6,700 in credit card debt, which combined with the high interest being paid on the balance, is a true formula for disaster.

 The economy is not getting any better, everyday it seems like we are waking up poorer and the main reason behind the lack of purchasing power and the lack of financial stability in today’s society is the amount of debt being carried.  One of the main reasons for divorces today is financial problems.  Also one of the highest causes of stress in today’s society is money problems.  The goal of this article is to give you in my opinion the most effective and sure way to eliminate credit card debt. The surest and most effective way to eliminate credit card debt is to use a method called Debt Roll Down.  The method has been used by many for many years.  There are a few modifications to it, but here is the way that I would set up the method.

  1. Grab your list of current liabilities (debt).  Arrange them in order from lowest amount owed to highest. (Another train of thought is to arrange them from or from highest interest owed to lowest).
  2. Include all of the minimum payments for all the cards.
  3. Look to see how much you could contribute to the Debt elimination.  Obviously the higher the amount that you can contribute the faster you will be able to eliminate your debts.
  4. Each month, continue to pay the minimum payment on all the credit cards except the first one in the list. (Should be the lowest balance or highest interest) On the first card on the list pay the minimum plus the amount that you had allocated for Debt Elimination. 
    1. Example if you were paying $50 as a minimum payment and your Debt Elimination amount is $100 then you will pay $150 (we will call this Debt Elimination Factor (DEF)) on that credit card  every month until the balance is paid off
  5. Continue to pay off the new Debt Elimination Factor on the first credit card until the card is paid off in full. Then take the amount that you were paying towards the first credit card and pay it on the second card on the list plus the minimum payment that you were already making on the second card.
    1. Example if you were paying $50 as a minimum payment on your second card, then you will be paying $200 from now until the card is paid off in full. ($50 minimum payment plus the $150 you were paying on the first card as your DEF). Keep in mind that this amount will be your new DEF.
  6. Follow this process down the list until all the cards are paid in full


Here is an example of the Debt Roll down at work:




Monthly Min

Debt Elimi








Card 1






Card 2





Card 3






Card 4






Card 5







1. First pay off Card 1, by paying $150 a month if you do so you should be done with it the first month.

2. Then you will pay $150 a month plus $50 minimum payment on Card 2 giving you a new DEF of $200; continue to pay that amount on the second card until it is paid off.

3. Continue that process until all your debt is paid off.

Imagine if you throw in your car payment or mortgage into the mix.  If you end up paying your last account on the above example you will have an extra $393 a month to pay towards your car payment.  Once you are done with that you will have an extra $693 or $793 (assuming $300- $400 monthly car payment) or more depending on your car payment, to pay down your mortgage. Imagine how fast you could eliminate your mortgage. Obviously this is an example but try it with your own personal numbers and you will be amazed at what you could accomplish.

Personal Choice

The reason why I like to use the lowest amount first instead of the highest interest rate is because it gives me a good feeling to see that I am actually paying off the credit card balances quickly. 

What I like to do as an incentive is do something fun every time that I pay off one of the credit cards.  Nothing expensive that will keep me in the poorhouse but just something to keep me motivated.  A good rule of thumb could be giving yourself or doing something that would equate no more than 10% to 20% of your DEF for the card that you just paid off as an incentive after you pay it off.

 A very important aspect to keep in mind when paying off the cards is that in order for the debt roll down to work you need to stop charging the cards.  A wise man once said if you find yourself in a hole, stop digging.  If you continue to charge the cards, your roll down will never work, because you will be stuck in a vicious cycle.  

 Remember you can take control of your debt if you take it one step at a time.  Start by taking action, write down all your credit card debt in order, allocate or decide on the maximum that you can pay to start eliminating the cards and use that amount every month to pay off the first card in your list.  Pay it off and continue to roll down the cards in your list until you are done with all.  Enjoy the freedom of knowing that you have a method that works and that you can pay off your cards and other debt with some time and dedication.  The key thing is perseverance to stay on course and if you get off course don't despair just regroup and continue the process. 



Add a new comment - No HTML
You must be logged in and verified to post a comment. Please log in or sign up to comment.

Explore InfoBarrel

Auto Business & Money Entertainment Environment Health History Home & Garden InfoBarrel University Lifestyle Sports Technology Travel & Places
© Copyright 2008 - 2016 by Hinzie Media Inc. Terms of Service Privacy Policy XML Sitemap

Follow IB Business & Money