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Debt Ladder

Debt Ladder

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A very common question that comes up in consultations; “Is it possible to pay off a large amount of credit card debt?” The answer is yes. It’s not as simple as just writing a check and viola, the debt disappears. Unless of course you hit the winning lotto numbers or received a large sum of money that you weren’t expecting.

In other cases, paying off credit card debt takes time, persistence, budgeting, and dedication.

Did you know that if someone has $8,000 in credit card debt, if they make their minimum monthly payments on time each month, no late fees and no new charges; it will take 38 years to pay the balance in full? After all payments are made, they will have paid a total of $16,301 in principal and interest. (based on an estimated 19% interest rate)

I don’t know about you, but paying on something for 38 years and doubling the amount owed doesn’t sound too budget friendly. Especially considering other expenses such as home, car, etc.

So what are the other options? Besides winning the lottery, of course.

One option is something called a debt ladder. You consistently pay each credit card off one at a time while still maintaining minimum payments on the other(s) in a debt ladder type equation.

  • Begin with focusing on the lowest balance first. Pay twice the minimum payment until that one is paid in full.
  • Next, focus on the next lowest balance, but use the money that you had been paying on the one that is now paid off. Example: you were paying $80 on the above mentioned card… now focus that $80.00 on the next card you wish to pay off (plus the current payment). So if your minimum payment is $100, you would be paying $180. (the minimum plus the $80)
  • On to the next card. When the above 2 cards are paid, do the same as before. Use the $180 you were paying, plus the minimum payment.
  • This goes on until all are paid in full. It does take time. It also takes on the strategy of the “ladder” effect. Each time one is paid off, you are focusing that payment on the next one to eliminate your debt faster.
  • This method is a great way to pay off debt if you can afford your payments now and have no change in income or other financial status.

There are other options available if this is not something that a person is capable of due to loss of income, change in financial status, or unexpected expenses.


“Where there is no struggle; there is no strength” ~ Author Unknown

Author: Kat Hollerbach

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