Pay Off Credit Cards With 'Debt Dash' Method

Tackle debt by paying off the credit card with the lowest balance and moving on to the next, writes Washington Post/Bloomberg columnist Michelle Singletary.

Posted:
 
saving_111511_large
Thinkstock

In her Washington Post/Bloomberg column, Michelle Singletary says that people who are resolved to reduce their debt in 2012 should use the "Debt Dash" plan. The plan involves ruthlessly attacking debt by paying off credit cards with the lowest balance first.

There are a number of ways to pay down your debt. One way in particular I call the “Debt Dash Plan,” which I wrote about in my recent book, “The Power to Prosper.” It’s a way of paying off debts similar to running a 100-meter dash, a quick race. You start by attacking -- and I mean ruthlessly -- the debt with the lowest balance to get rid of it as soon as possible.

I’ve found in working with individuals and couples that when they can knock off a bill quickly, it motivates them to press on and aggressively tackle their remaining debts.

On the Debt Dash, you list your debts and then take any extra money you have -- say, from reducing expenses or from a second job -- and apply it to the debt with the lowest balance while making the minimum payments on the others. When you’ve paid off the first debt, apply the full payment amount from the first debt to the one with the next lowest balance, adding any extra money you can, until that one is paid off. You continue paying the debts this way until they are all gone.

Read Michelle Singletary's entire column at the Washington Post/Bloomberg.

Like The Root on Facebook. Follow us on Twitter.   

Comments
The Root encourages respectful debate and dialogue in our commenting community. To improve the commenting experience for all our readers we will be experimenting with some new formats over the next few weeks. During this transition period the comments section will be unavailable to users.

We apologize for any inconvenience and appreciate your continued support of The Root.

While we are experimenting, please feel free to leave feedback below about your past experiences commenting at The Root.