How To Kill High-Interest Debt

how to get rid of high-interest debt credit card payments owed

Do you lie awake nights wondering how to get high-interest debt out of your life? Do your dreams often include slaying a plastic dragon that has a giant "25 percent APR" sign hanging from its neck? If so, you are probably ready to consider some commonsense ideas about how to eliminate those kinds of financial obligations. 

The exceptionally good news is that there are dozens of strategies for reining in the amount of interest you pay out each month to credit card companies, student loans, and more. The concept behind each of the methods involves getting rid of costly indebtedness as quickly as possible, or at least replacing it with low-interest obligations. Here are several of the most effective strategies for killing the dragon. 


This old reliable strategy involves moving your debt around, usually from one credit card to a lower-rate one. You need to have enough room on the lower-interest cards to make this method work, but lenders are often eager to do a transfer in order to get your business. Reallocating what you owe is not just a matter of juggling, but of minimizing the cost of debt. In the long run, it's possible to save thousands of dollars per year just by arranging your indebtedness properly. 

Home Equity Line Of Credit 

If you own a home, chances are good that you can defeat debilitating debt with a home equity line of credit, also known as a HELOC. The kind of arrangement you get on a HELOC depends on a few different factors, like how long you want to keep the line open, how much you need to borrow, and what your current credit score is. The bottom line is that HELOC rates are typically reasonable and competitive, which means you can immediately receive cash to make a positive impact on things like credit cards and upside-down auto loans. A wise way to start is by looking at a helpful guide that explains all the ins and outs of taking out a home equity line of credit. 

Vehicle Refinancing 

It is possible for two-car and three-car families to access more cash each month by refinancing their vehicle loans. Be sure to crunch the numbers first and make sure that a car refi will put more monthly money in your pocket. Of course, that extra cash will be used to pay down high-interest obligations at a faster pace. The win-win for many folks who start investigating this technique is the realization that they can live without multiple cars. By all means, if you discover you can get by with one less four-wheeled money-eater, sell it and put those funds toward debt pay-down. 

The Stack Attack 

This method can help manage credit card spending as well as pay down debts. The stack attack only works if you have enough income to go around and are not living paycheck to paycheck. The formula involves paying minimums on all your plastic except for the ones that carry the highest interest. Focus on paying them off completely, and then move on to the next card in the stack. When you're done paying them all off, retain only the single piece of plastic that comes with the best combination of terms, including a spending limit you can live comfortably with.

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