Paying off your credit cards (Part 2): The "debt killing factor"

Credit Card Debt Can Be Killed Quickly

Second in a 3-part debt-reduction series

By Mark Barnes

Direct Lending Solutions Staff Writer

Credit card debt, as witnessed in part 1 of this series, is destroying the financial lives of many Americans. If you dedicate yourself to creating a Debt-Killing-Factor, though, you can relieve yourself of credit card debt, as well as other debts, very quickly.

Remember, the best method for creating a solid Debt-Killing-Factor, or DKF, is to find extra monthly savings that you can add to the minimum payment on your credit card debts. There are many methods for creating this $40 to add to your monthly payment. You’d be surprised at how quickly you can save $40, simply by socking away the extra money you save from grocery coupons or store specials. This concept, along with others will be examined in detail in part 3 of this series on debt-reduction.

When eliminating credit card debt, begin with a small credit card, first. If you’ll recall, “Credit Card Debt Can Be Killed Quickly,” Part 1, looked at eliminating a $2,000 credit card by adding just $50 to the monthly minimum payment of $40, paying $90 monthly. Just over two years later, this payment is gone and it, no doubt, seemed very easy. Now, you’ll make good use of that debt.

With your $2,000 credit card debt killed and buried, you’ll be eager to rid yourself of that money-draining $5,000 credit card, which never seems to get any smaller, as long as you make the minimum payment every month. It’s time to turn your DKF into a full-fledged debt-killing machine, and you can use one eliminated credit card to quicken the assault on another.

Assume the minimum monthly payment on the $5,000 credit card, which has an interest rate of 19%, is $100. Again, if you pay just the minimum every month on this credit card debt, it would take you 37 years to eliminate the debt. Armed with the power of your Debt-Killing-Factor, you can pay it off in under three years, without changing your lifestyle one bit.

First you have to add some fuel to your DKF. Remember, you were paying a minimum payment of $50 on the $2,000. You added just $40 to that to bring your DKF to $90. That debt was killed 28 months later. You now have the $90, and you no longer have the credit card debt that it killed. So, you simply add the $90 to your $100 minimum monthly payment for the $5,000 credit card debt, and you have a new DKF of $190.

Pay this every month, and it will take you just under three years to kill this credit card. Best of all, you’ll pay just $1,385 in interest to the credit card company and, in the process, you’ll cheat them out of 34 years of monthly income and $13,382 in interest, keeping it all for yourself. Next...

Other debt reduction pages: Part 3 of this Series | Part 1 of this Series | Debt Consolidation Loans | Debtors Anonymous | Sitemap