There are many different schools of thought on the proper way to pay off your debt. Some say to start attacking the high-balance cards first, some say to go after the high-interest debt first, and some fall into my school of thought: start with the low-balance debt first. This is exactly how I started paying off my debt when I finally reached the point of “No More!”. I grabbed all my credit card statements, wrote down all the balances, and sent the most money that I could afford to the one with the lowest balance. Every other card on the list got the bare minimum payment until that first one was completely paid off (and even that one took a little while), and then I moved on to the one with the next lowest balance. Sure, this might have made the repayment of my debt take a little bit longer, and it might have cost me a little more in interest charges, but I did it this way for a few reasons:
- Motivation. Seeing a balance continue to drop month after month, instead of watching it stay stagnant because of interest charges, was very motivating.
- Hope. When that first credit card was debt-free, it gave me hope that I actually could do this. Trying to do them all at once was overwhelming.
- Focus. By sticking to the minimums on all the other cards and having only one card to send big payments to, I could budget my debt repayment more effectively.
I could not BELIEVE it when that first low-balance credit card statement showed up with ZERO balance on it. What progress! And as anyone who talks debt reduction will tell you to do, I then took what I was sending to the first card and added it to the minimum payment on the next lowest balance, continuing until all the debt was gone. It took a very long time to get there, but by focusing on the low-balance credit card debt first, the success gave me a big mental boost to keep going. A while back I wrote my series “The Start Digging Out Of Credit Card Debt Challenge” that should give you some help in getting out of credit card debt, so you might want to check that out if you are looking for more advice. Good luck, and stick with it – getting out of debt it hard, but it is so worth it!