The Secret to Cutting Your Debt IMMEDIATELY

By in Debt | 8 comments

Categories: credit, debt, goal setting, life

“Say NO out of love, and yes out of weakness.” Suze Orman

This means, NO to yourself for frivolous spending, NO to your kids. And NO to extravagances (you cannot afford) or wasteful spending. You will increase love of yourself and those around you when you practice the discipline to say NO.

MAIN TOPIC: The True Cost of Debt

Keep positive-debt sucks, you got yourself in trouble, accept it, and move on. Until you face up to reality and make a decision to get rid of the pain. You will continue to perpetuate it.

Here is the cost of making the minimum payment:

Let’s say you have $5,000 credit card debt.

 With an interest rate of 20%

If you pay the minimum payment of $133.33/month (declining slightly in later months) it will take ALMOST 23 YEARS to pay off the debt, and you will have paid $7,732.00 interest. That’s right; you will have paid a total of $12,732.00 for the privilege of buying $5,000 worth of goods.

With an interest rate of 9%

If you pay the minimum payment of $87.50/month (declining slightly in later months) it will take ALMOST 21 YEARS to pay off the debt, and you will have paid $3,373.00 interest. That’s right; you will have paid a total of $8,373.00 for the privilege of buying $5,000 worth of goods.

Now triple the $87.50 and pay $261.00 each month.

With an interest rate of 9% and a monthly payment of $261.00 it takes only 21 months to pay off $5,000.00 and you will only pay $418.00 in interest.

FACE REALITY; you need to pay down debt, for these reasons:

  • Reduce stress
  • Secure your financial future
  • Reach you goals
  • Add your own reasons:
  • ______________________
  • ______________________


There are all sorts of calculators, systems, and plans for debt reduction. I’m not suggesting they are bad, and if they work for you, great. But, my premise is consistent; MAKE IT SIMPLE. Debt reduction does not need to be complicated. Let me repeat this; DEBT REDUCTION DOES NOT NEED TO BE COMPLICATED!!

Here is a strategy to get rid of debt, NOW. I don’t know how long it will take, and if you want to find out, feel free to check out one of the debt calculators above. But the BarbaraFriedbergPersonalFinance premise of debt reduction is like the “NIKE” school of thought: Just do it! Don’t obsess on how bad it’s going to be or how long it’s going to take, just follow these simple steps and begin!

1. Stop using all credit cards. NO EXCEPTIONS!

2. Renegotiate your interest rates – Lower your interest rate(s) now and decrease the total amount of interest you end up paying.

Call the number on the back of the credit card and ask to speak with customer service.

Here’s how Luiza did it.

Luiza: Hi, my name is Luiza and I currently have a $5,000.00 balance on my “CREDITSTINKS” credit card. The interest rate is currently 20% and I would like to lower the rate to 9%.

Customer Service: I’m sorry, I don’t have the authority to do that.

Luiza: Please connect me with a supervisor.

Supervisor: What can I do for you?

Luiza: Hello supervisor, I would like to lower my interest rate to 9%.

Supervisor: I’m not sure I can do that.

Luiza: Well, I would like to keep my business with your company, but if you cannot lower my interest rate, I will need to transfer my balance to a card with a lower interest rate.

Supervisor: We want to keep you as a customer. We can only lower your interest rate to 14%.

Luiza: Then I guess I will need to follow up with one of the other companies who offer me a 1.5% rate for a balance transfer.

Supervisor: Well, I guess I can lower your rate to 9%.

Time spent: 10 minutes

3. Repeat process on every credit card. Don’t worry about calculating how long it will take to pay off your debt.

4.  Pay at least TRIPLE the minimum on THE SAME CARD EVERY MONTH.

5. Pay double the minimum on the remaining cards.

THAT’S IT. You are done. Look, if you can pay more, wonderful. DO IT! If you can only pay triple on one card (and not double on the others), do that and just pay the minimum on the others.

When the first card is paid off, move on to triple the minimum payment on the next one. As you see the balance on your debt declining, your motivation to pay it off goes up.

No purchase is worth the pain of being in debt!


Get a notebook and label it: “(your name) Personal Finance” and keep it by the computer. Use it to keep all of your personal finance goals, thoughts, activities, and plans.

  1. Make the call to lower the rate on ONE CARD TODAY. Don’t delay.
  2. Read about  RichMomSingleMom’s  heartfelt pain of debt, and let it motivate YOU like it motivated her! (She’s now well on her way to wealth!)


Help I Can’t Save, I’m too Far into Debt-Part 1

Help I Can’t Save, I’m too Far into Debt-Part 2




  1. Last summer I tried to negotiate a lower interest rate. Spoke to a supervisor. And you know what he did….he cut my line of credit to $189 above the current balance. No rate reduction (and I am at 19.24%). At the time, none of my cards had a balance transfer offer.

    I am finally able to transfer a third of the balance now to a lower rate card (2.99 for 6 months, and 9.24% after that).

    Be careful!!


    June 10, 2010

  2. @Mysti-Thanks for the story! That really stinks! I’m glad you finally were able to transfer part to a lower rate card. Hopefully, you are more motivated to get rid of the balance on the 19.24% card! Thank you for telling your story! Best regards and good luck becoming debt free! Best regards, Barb


    June 10, 2010

  3. Barb,
    Don’t know about Mysti, but these companies commonly know the customer’s FICO scores. A high FICO means that transferring to another company is difficult, so the current credit card company is not too worried about losing the customer. I still agree with your advice about trying though. They might have done Mysti a favor by lowering her limit…she can’t borrow as much.

    In the end, your advice to pay triple/double (or more) is sound, no matter what the interest rate is. The quicker you lower that debt, the less interest you pay.

    Joe Plemon

    June 11, 2010

  4. Love that quote by Suze Orman. I do think saying no is important to be strong financially. This was hard for me 4 years ago but doing so single-handedly was one of the most powerful PF lessons. It caused be to set up financial boundaries that allowed me ultimately to become debt free. Great post Barb,

    Roshawn @ Watson Inc

    June 11, 2010

  5. Mysti,
    Last summer was a different world for credit. You tried renegotiating at a scary time in our economy. Credit Card companies were looking for any reason to cut your limits then. When they did that, that would have been the first credit card I cut up and paid off. I would no longer be their customer.

    Great Article! Another point would be to understand why you have the debt in the first place, so you don’t continue down the same path. Barb’s example of paying off the card with minimum payments assumes you cut it up and are NOT charging more on it!

    “No purchase is worth the pain of being in debt!” Great comment at the end!!!


    June 11, 2010

  6. @Joe, I wholeheartedly agree. In generaly, even if you don’t succeed, I’m of the belief that it never hurts to try to negotiate! (I may even overdo the negotiating in general:)).
    @Shawn, It’s amazing how hard it is to say NO, to ourselves, our kids, things etc. I believe discipline is way UNDERATED. Saying no is reallly empowering on so many levels. As usual, I appreciate your intelligent comments!
    @Todd, You raised a really important psychological point. It can be very helpful to figure out what need the overspending is attempting to fill. More stuff is only a REALLY SHORT TERM problem solving strategy.
    Thank you all for such a depthful discussion. Best regards, Barb


    June 11, 2010

  7. I tried cutting the interest to my BofA card, but they told me that was the standard rate. I couldn’t stand them right after I opened the card anyway. So I rearranged by snowball payments, found some $ to make the payments go quicker than scheduled and WHa-LA! Paid it off and closed account. 😉

    Money Funk

    June 12, 2010

  8. Hello,
    Thanks for all the useful information I found on your site. I will bookmark and visit again. I found you while doing a search for “Credit union efficiencies”. Your site was most helpful in my research….


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