Credit Card Payoff Strategies: Mr. Spock vs. Captain Kirk

Credit Card Payoff Trek

Credit Card Payoff Trek

Anybody who has ever suffered with the burden of high-interest debt, particularly unsecured debt, knows that the burden can suck all of the joy out of life, not to mention how it can suck disposable income. There are plenty of good reasons to make a resolution to reduce balances on credit cards, but it’s obviously easier to preach about than actually do it. There’s no preaching here but simply some solid advice about ways to work on this issue.

In many cases, people who have successfully paid off high and burdensome credit card balances decide upon a strategy and stick to it. In that spirit, consider these two credit card payoff strategies.

The Logical vs. The Satisfying Debt Payoff Strategies

Mr Spock says: It only makes sense to payoff credit cards that generate the highest interest rates first. If the high-interest balances get reduced, it will also reduce the cost f the debt. It’s logical


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Captain Kirk disagrees: Nah, that will take too long to enjoy any satisfaction. A better way to approach this problem is to simply pay off the smaller balances off first. It makes everything simpler and feels satisfying faster.

Well, it’s easy to assume that Mr. Spock manages his Star Trek credits a lot better than Captain Kirk does. That side, he is only the first officer. Captain Kirk is the captain. The virtue of paying off smaller balances more quickly lies in that faster sense of satisfaction. See, no credit payoff strategy will work if it doesn’t get adhered to. Very often the process of reducing debt can take several months or several years.

An Example of the Satisfying Credit Card Payoff Strategy in Action

For example, consider the case of Amber, a single mother with four outstanding credit card balances of about $10,000. She has balances of $140, $820, $2,500, and $5,000. As a teacher, she makes a respectable income of just about $50,000, so she can live comfortably but not with those credit card balances hanging over her head. She has also lived in her loan for seven years and has some equity. However, within about six months, she was able to pay off the two smaller cards, leaving her with somewhat lower balance on only the two larger cards.

With a resolution to leave the two clean cards only for emergencies, she doesn’t feel as overwhelmed by the thought of paying off about $7,000 because it is only two cards she needs to handle. Once Amber cleaned off two of her credit cards, she also managed to get a home equity loan to pay off these to cards and is making installment payments on that loan at a much lower rate. In the beginning, it didn’t seem as if Amber chose the most logical way to reduce her credit card debt, but it worked out very well for her in the end. Because she managed to improve her credit scores by clearing two cards, she actually didn’t end up paying more overall interest after she got the home equity installment loan.

As a note, lenders are very picky these days about home equity installment loans and especially, home equity lines of credit. These can be great tools for some people to use to help reduce high-interest credit card debt, but they are better pursued while credit ratings are high and not low.

What’s the Best Credit Card Payoff Strategy for You?

The right answer for a lot of people is attacking smaller balances first. It may also help to access other funds to pay down high-interest debt balances. Sometimes, the whole problem has to be attacked in steps. The most important thing is to explore alternatives and commit to a plan.


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