The KISS Principle in Action

For those of you who do not know, KISS stands for Keep It Simple Stupid. This weekend I had paid off another credit card, leaving only 2 active credit cards. A few years ago I was responsible for making payments on 10 credit cards each month. Not only was it more difficult to keep track of when I paid the cards, but I found it overwhelming to decide what card I paid off first.

About a year ago, I was tired of being overwhelmed and I decided to transfer the balance of several cards to two cards that gave me a low rate for transfers. Not only did I reduce the interest I paid, but I had cut the number of cards to keep track of from 10 to 5. It was also easier to pay down debt because I could focus on paying down the cards with the smallest balance, because those cards had a higher interest rate than the credit cards that I did a balance transfer to.

I focused on the credit card with the smallest balance first and paid the minimum payment on the rest of the cards. Once I paid off a credit card I could take the monthly payment I was making to the paid off card and add it to the minimum payment that I was making on the card with the next smallest balance. Using this system I was able to pay down three credit cards in a little over a year.

Even though some stores offer tempting incentives like no payments till next year, or 0% interest on your purchase for the next year. I know that it is not worth the extra hassle or the potential cost to my future credit balances.

Comments

[Jean]

That's actually a really good plan, and one I never would have thought of on my own. Thanks for sharing it.

[Douglas Cootey]

This plan works. I've implemented it many times in the past and I'm glad you shared it with others. The only problem I have with the plan is a) if you've jacked each card up to the limit you cannot combine debts. This makes getting ANOTHER card very tempting but I do not recommend it. It is better to be patient and choose one card to make room on for other debts. Once you've done that, and stuck to the plan as you outlined, people will find momentum helps them get out of debt quickly. There's also a b) Do not use the cards anymore! LOL This plan falls apart for us when my wife uses the card and jacks the balance back up.

But being in debt is a lousy way to live. I think your plan is fantastic not just because I use it too but because it works so well. I highly recommend it. Good post!

[Paula]

Congrats on getting Card #3 paid off! Can't wait to hear how repaying the last two go!