How to Payoff your Debts With Debt Stacking Method

by Cornie Herring - Date: 2007-05-09 - Word Count: 550 Share This!

Struggling with credit card debt issues? You are not alone, average U.S households are holding $10,000 of credit card debts. Paying off the debts has already become American's dream in general. Finance experts introduce many methods that can help you to clear off your debts. There is not one method that suits all debtors, but each debtor should be able to find one method that suits their debt situation which they can work toward to payoff their debts. This article will go through one of the debt payoff method called "Stacking Method".

If you are attempting to pay off your debts by sending slightly more than the minimum to each of your lenders per month, you probably will start to get frustrated at how slowly the balances are dropping. Theoretically, you are working toward reducing your total debts but psychologically you feel frustrated because you feel your balances are dropping too slowly and you may give up to continue with your effort and take a dramatic decision to go for fast relief, which is also the worst option: bankruptcy filing. Bankruptcy filling should always be your last option. Although bankruptcy filling can gives you a fast debt relief, its consequences follow you for years.

If you have such feeling that your debt balances are not reducing according to your expectation and your current finance situation allowing you to pay slightly more than the minimum amount. Then, you can make a huge difference in shortening the payoff time, as well as paying far less interest, by making one important change. It's called Debt Staking method.

How does it work? Read on...

First of all, you need to make a summary on what you are currently paying, in total, toward debt per month. Once you have that figure, list down your debt in descending order according to highest interest to the lowest interest rate.

From now on, you pay the minimum only to every debt in your list except for the first one in the list, which is the highest interest rate debt. For that debt, you pay the minimum plus the balance you left from the total sum you figure out earlier. You repeat this process every month until our highest interest rate debt is paid off. Then, you continue to apply the same method to the next highest interest rate debt in your list and so on.

You will see you debt is removed one by one from your list as you go on. You will be debt free once your debt list becomes empty.

By focusing all your extra money to one debt at a time and targeting on the highest interest rate, you are erasing your most expensive liability faster. As each debt gets paid, you apply the money that uses to pay the first debt to the 2nd highest interest debt which has the lower interest rate as compare to the first one. Hence, the 2nd debt will be wiped out faster than the first one. And you continue to repeat the same process for the next and following debt, you will notice that each successive debt is wiped out faster than the one before. You will be happily surprised at how expedient this process is!

You see, by slightly change your debt payment method will make all the difference in dealing with your debt.

Related Tags: credit card debt, debt consolidation, debt free, get rid of debt, debt reliaf, payoff debt

Cornie Herring is the Author from This site is an informational website on credit basics, debt consolidation and bankruptcy. Visit her "Money Matters" blog for more money related information.

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