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The voice of soothing calm.

Credit debt management tip

Quick post. I’m constantly looking for ways to optimize my money management. I’ve carried some debt on multiple credit accounts since college days, and always wished for a way to transfer the balance from my higher interest account to the lower one without incurring transfer fees (usually 3%). I had been resigned to handling this merely by paying down the higher interest balance aggressively, while only paying the minimum on the lower interest balance. That is until recently when, like a 2000-ton meteor ejected from a supernova 50 billion miles away crashing at the speed of light into an ant at the pinnacle of Mount Everest, it hit me: the balance transfer can be done indirectly!

If you find yourself in the situation of having debt in multiple revolving credit accounts each with a different interest rate, here’s a fine and dandy way to minimize your interest liability that doesn’t cost anything.

  1. For all the normal everyday living expenses that come up which you would normally pay with your paycheck/trust fund allotment/education stipend, instead pay them with your low interest credit account.
  2. At the end of the month, this leaves you with a higher balance on your low interest account, but also with an equivalent surplus in your operating budget.
  3. Take that surplus and allocate all of it toward paying off your higher interest balance.
  4. Repeat until you will owe no more at the end of the month to your higher interest account.

It might take a couple months, but the end result is that you’ve moved your balance from the high interest account to the lower interest account. Kaboom!

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Shaun said:

Hi Mark. Long time reader, first time comment-person thing. That’s one way to manage your debt. Another way would be for you to stop eating 5, 6 meals a day. You may find yourself with a few more George Washington Carvers to stuff under your mattress. Food for thought. No pun intended.

Mike McG said:

Hey good to hear from you. I’m a big fan of your website/freakshow thing. Thanks for the advice, I love peanut butter!

Jordan said:

Great tip. I wouldve maybe used this method but I got rid of all my credit cards. Will pass it along though!

debbie said:

I was blessed to grow up with parents with sound financial sense. For those that weren’t, you are a godsend!

Mike McG said:

Thanks! The discipline needed to successfully pull off this technique can’t be overstated… Make sure you only spend on that high credit card what you can actually pay off on the low one that month, i.e. budget and track spending! Good luck and glad I can help!!


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