Comments on: 7 Steps to Pay Off and Eliminate Your Credit Card Debt Faster

By: Charles Baratta

Charles Baratta — Thu, 02 Dec 2010 23:51:25 +0000

One advice that I got from another blog is that if we have multiple credit cards we should eliminate first those credit cards that has the lowest amount of debt, then to the highest debt.

By: Sam

Sam — Sun, 14 Jun 2009 03:59:03 +0000

No Debt is not fun, and using other credit cards pay one another is not good, but does help, sometimes gets you indeep in debts, so watch your spending and have an alternative plan to kicks in once plan “A” does not work,

By: Andy

Andy — Tue, 31 Mar 2009 23:09:14 +0000

That’s a good common sense plan on how to attack your debt problem, getting rid of your worst problems first. But I would have to agree that personal finance is more about finance than about math.

If you have a ton of credit card debt like over $10000, and are in dire straits, meaning you are overwhelmed, I recommend going through a debt settlement company where they allow you to stop paying all your credit card bills immediately in order to offer the CC companies a settlement. It’s risky since you could go into default on your current accounts but if you are nearing bankruptcy anyway it could be a lifeline.

By: Pinyo

Pinyo — Wed, 12 Dec 2007 04:40:16 +0000

@Kevin – welcome to Moolanomy. Either method works for me. I prefer the mathematically better approach, but I am sure many people will be more comfortable with the psychologically better approach.

Great point in the closing paragraph.

By: Kevin

Kevin — Tue, 11 Dec 2007 12:42:23 +0000

Its actually more effective to sort the cards in order of lowest balance to highest balance, regardless of the interest rate.

Personal finance is more about behavior than math. People are less likely to stay on track when tackling large balances rather than small balances. It also gets your snowball moving much faster to go from smallest balance to largest balance.

The point that people need to realize is that the interest rate isn’t the problem. The out of control spending and use of the cards altogether is the problem.

By: Pinyo

Pinyo — Mon, 03 Dec 2007 16:59:59 +0000

@KCLau – Thank you!

@JvW – Welcome to Moolanomy and thank you for the compliment!

By: JvW

JvW — Mon, 03 Dec 2007 03:59:24 +0000

I love the illustrated step-by-step instructions! Great post!

By: KCLau

KCLau — Sat, 01 Dec 2007 09:20:54 +0000

Very nice illustration and clear explanation.
Good work!

By: Pinyo

Pinyo — Fri, 30 Nov 2007 13:51:04 +0000

@glblguy – That’s a great add. I have seen the “10% math and 90% psychology” discussed before and as a logical person, I was against it at first. However, when I reflect further on this, I really support the argument at this point; that is, the mathematically best option may not be the best for everyone.

By: glblguy

glblguy — Fri, 30 Nov 2007 12:45:36 +0000

Great post Pinyo! There is another option, and one that I prefer…pay them off in order of balance, lowest to highest rather than by interest rate. Sure, mathematically paying off my interest rate makes more sense, but frankly if you have this kind of balance on high interest rate cards your not a pro at math anyway (this includes me).

Paying off by lowest to highest balance is a psychological win. It makes your debt seem to go away faster and gives you that feeling of progress. I think personal finance is about 10% math and 90% psychology.

One other note, it used to be you could transfer to a low rate card for free. Most offers now have a 3% or more balance transfer fee, so be aware of that. Now granted, that’s probably still cheaper than the higher rate, but something to consider.