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The DOLP Method

206579_credit_card__gold_and_platinumCredit card debt is something that many millions of consumers face on a daily basis. As the economy starts to recover, we often find ourselves in more debt due to economic hardships that had become unavoidable. We must now find a way to get out of debt and restore our financial independence. The real question is, can we afford to pay these minimum payments monthly and how will we ever get out of debt that way?

Although many speculate that you should definitely pay more than your minimum payment, it is sometimes just too much money to spend when we consider our other bills and current salaries. We must eat and buy food and gas to get to work. Sure, if we only have one credit card bill, we can most certainly pay a bit more than the minimum, but what if we have three or even six different payments due every month, what can we do? Well, David Bach has come up with a solution that will eliminate your debt in a way that is completely manageable.

In his newest book, Mr. Bach discusses a way to pay your minimum payments on all of your credit cards except one. You first need to rank them by a DOLP score. DOLP, or Dead on Last Payment is calculated by dividing your minimum payment by the remaining balance, the smaller the number, the higher ranked that credit card will become. You then pay more than the minimum, preferably double the minimum amount, on that particular credit card until it is paid off. You then move on to the next ranked card and follow the same procedure until all of your cards are paid off.

His plan also outlines the importance of organizing your credit card statements and creating an individual file for each to accurately track your progress. Although most financial experts advise paying your highest interest card first, Mr. Bach advises you to pay off the credit card with the highest payment to balance ratio credit card first as it will be the quickest to pay off, thus lowering the amount of credit cards you must pay every month.