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The Psychological Aspect of Debt Repayment


I have been having a tough time lately.

We all know my #1 goal – ERADICATE credit card debt. Do whatever it takes to get it out of here!

And yet, I’m having such a tough time.

I look at all our other debts and I want to pay toward all of them (more than just the minimums), so I’m having a really hard time reminding myself that – NO! – I’m going to pay minimums for everything else, and put all the extra money toward credit card debt.

It’s especially hard since the credit card I’m currently paying toward (Wells Fargo) has such a high balance. I really “get” the Ramsey-esque idea of paying off lower debt first for the psychological “boost.” But in this case we’re talking about a HUGE difference in interest rates!

Here are my two credit cards that currently have balances (remember – I just paid off a third card about a month ago)

  • Wells Fargo, APR = 13.65%
  • Bank of America, APR = 7.24%

My Wells Fargo card has almost DOUBLE the interest rate as my Bank of America card. I want to have the discipline to tackle the higher APR card first so I’m not just throwing away money toward interest……but it’s hard, y’all!!! (side-note:  my WF balance is almost thee times higher than the BoA balance. I’ll give you updated balances at the beginning of May).


Same thing applies to the license debt we’re paying. The minimum is $55/month, but when I pay online, it’s broken down into a dozen smaller fees. Many are only in the $250 range. It would feel SO GOOD just to pay the entire $250, instead of dragging it out over FIVE MONTHS paying only the minimums. But this is interest-free debt so it makes no sense to do that when I’m paying HUNDREDS in interest to Wells Fargo every month.


Somebody save me from myself! I’m struggling!




  • Reply Juhli |

    Have you tried setting progress goals? Like, get the WF balance below x, then below y, etc. Celebrate those milestones by having a dance party. Create a big thermometer chart and color it in. Rename the debt – I can certainly thing of some interesting names using those initials LOL and then create a mantra. You will be so glad to see your interest charges go down – that alone could make a graph for the frig. Make this visible, mindful and have some fun with it.

    • Reply Ashley |

      No, I never even thought of this! What a great idea! I’m also a very visual person so I think I’d really respond to the big graph on the refrigerator! Thanks for the ideas!

      • Reply Slinky |

        There’s a bunch of creative ways people have come up with for tracking debt milestones. The only one that comes to mind is a paper chain where they’d cut off a link for each $X. Do some searching though and there’s bound to be a ton of fun ways to do this.

        • Reply Ashley |

          I love this idea!! Sometimes I feel a little “old school,” but this type of physical 3-D activity seems more rewarding to me than a chart on the computer screen.

  • Reply Mary from SC |

    How much extra are you able to put towards your credit card debt each month now that you have the first one paid off? I personally subscribe to the Dave Ramsey method because of the boost I get when a debt is finally paid off. Have you done the math with both credit cards to see just how much extra you would pay in interest if you chose the Bank of America debt first? If you were paying $300.00 a month on the Bank of America, you could have it wiped out in 8 months. $400.00 a month would be six months…that’s a light at the end of the tunnel.

    • Reply Ashley |

      True. I haven’t actually done the math yet but I definitely should so I have the full picture/information.

  • Reply Kristina |

    I get what you are saying. I know that economically/financially, it’s smarter to pay off the high interest first. But when I was getting out of debt, the first one I went after was my student loan debt, because it just made me feel better. (plus, when it was gone, it was gone.)

    So I might be the only one to say this…but if you want to rid yourself of the license fee…pay it!

    • Reply Ashley |

      I know, right!? It’s not as easy as a simple mathematical calculation because there IS a psychological aspect involved! I totally get wanting to tackle the student loans, I hate mine!

  • Reply Walnut |

    Wells Fargo is your highest monthly minimum (outside of the car loan). If you can destroy this debt while you’re still early in the game and highly motivated, you’ll set yourself up for so much success when you start to tackle the daunting student loan debt. Break this debt up into pieces and celebrate everytime you knock another $1000 off. Does the monthly statement give you on of those boxes saying how long it will take you to pay off if you just pay the minimum? If so, track this number and watch the number of monthly drop with every statement. Maybe this is even one of those debts that you pay on two or three times each month. As soon as you have money allotted, pay it.

    Can you remind me of your plan with the mattress loan? Are you going to make one big lump payment in July or so to avoid any surprise fees in September? Will you pull this from savings or just dedicate all of your extra payments in the month you decide to pay it off?

    • Reply Ashley |

      Good ideas regarding WF. Regarding the mattress loan, I paid a big ($1000) snowflake payment last month. I don’t have the statement in front of me but I think the total amount due right now is only in the $100-$200ish range (like $175ish???). I was originally going to make a big payment in summer, but now I think I’ll ride out the current situation ($100/month) and it will be gone in the next 2 months or so. It wasn’t a lot of money monthly, but it will also be snowballed into WF debt. I have such vehement hatred of WF right now (especially after my “fighting mad post – phone call to them last week), that I really think I have the motivation to knock it out early but its still hard sometimes when I have all my bills laid out and I want to pay more toward ALL of them. I like the idea of celebrating mini-milestones with the WF card!

      • Reply Walnut |

        You have more self control than I do if you can manage to stick to the plan to just pay the minimums on that furniture loan. When any debt gets that low in the ball game, there’s almost nothing that can stop me from paying the last smidgen off. I’ll throw any bit of fun money in my budget straight to the debt and loot my house for stuff to sell on Craigslist to make up the difference. The high from paying something off is addictive, you know?

  • Reply JayP |

    I really disagree with Dave Ramsey on this one. Its just mathmatically wrong to pay a lower interest rate card balance before a higher one. It might make you feel good to pay one off totally, but lots of things may make you feel good that arent the best things for you! I sure shopping and buying things we can’t afford make some people feel good too. I think he’s just wrong there.

    • Reply Kiki |

      I agree with you on this, Jay. In my humble opinion, you need to get the emotion out of debt and approach it as pragmatically as possible. I know that Ramsey talks a great deal about the highs you get with those early victories of paying off smaller debts, but I prefer the get tough approach of looking at interest rates first vs. the feel good. After all, with a boatload of debt, your life is in an emergency mode! A person in this place needs to look at the NUMBERS first. You are just throwing good money away when you ignore interest rates.

      • Reply Ashley |

        Yeah, I think there are times when the Ramsey method works. I would be more apt to do it if the interest rates were closer (7.25% versus 8%, for example). But there’s such a HUGE discrepancy in the interest rates that I just HAVE to pay the higher one first. It disgusts me!

    • Reply Deeanna |

      As a statistician, I totally get that the Ramsey approach (smallest debt) is mathematically wrong. However, Dave Ramsey also says that it is not math that got you into the debt/situation. It’s got a lot to do with emotion. Gaining momentum with a snowball helps especially when it seems impossible.

  • Reply Jasmine |

    I completely feel your struggle. A lot of my student loans are 2000 which I could domino several of them since I don’t pay rent. But my car which was over 10 grand last December is a much higher interest rate. I personally get pleasure from watching that thousands place decrease by 1 each month. It’s gotten to where I’ll make scrimp to make extra payments to make that number decrease by 1. In my mind, 7 grand and (a lot) of change is much better than 8 grand even if the ‘real’ difference is only a few bucks.

    • Reply Ashley |

      I totally agree! There’s really a huge psychological “boost” every time that thousand-digit number decreases!

  • Reply Shoeaholicnomore |

    I understand wanting to save money by paying less interest by tackling the higher APR card first, but for me personally I need the wins along the way. Paying the smaller stuff off first helps keep me going. I like seeing the progress. Do make a chart or progress bars in excel or something so you can see your progresss visually. It helps! One last thing, do whichever one feels right and keeps you going. Personal finance is personal, you don’t have to do what the experts say or what the commenters/readers on here say. Do what’s best for you! You’ll get there, just keep going! 🙂

    • Reply Ashley |

      I track my progress carefully, but all mathematically (not visually). I really like the idea of using a visual – chart or graph – to help me SEE the progress! And I totally agree, because personal finance is so personal, you have to do what’s right for YOU! Even though I’m struggling with it, I just have to stick with the higher APR card right now (against Ramsey’s advice). Hopefully I’ll get another “boost” in the next couple months when I finish paying off my mattress loan. That will be another fun celebration!

  • Reply Jessica |

    I totally understand this! When I paid off my highest balance card, I tried to remind myself of a few bigger purchases I made on it and made those the milestones. When I had paid off those amounts, I just thought to myself- Oh, I just paid off that vacation, computer etc. It made me feel like I had wiped out a larger number of debts, even though it was all on one card.

    Think about how quickly you’ll knock out BOA once you’ve built up so much momentum from WF. By the time you get to BOA, you’ll knock it out in no time!

    I think the chart or graphic idea is a good one. Keep your eye on the prize!

    • Reply Meghan |


      What a clever idea!! I may use that idea for my school loans, I went to a state school so I can easily see it as paying off each semester individually and get to celebrate those victories every few months. I already do it for the mortgage in a “we knocked another year off” kind of way but I never thought to translate that to other areas.


      • Reply Jessica |

        Great idea! I never thought about doing that for my student loans. Glad we could help each other out 🙂

  • Reply AS |

    You know the right financial answer is to hit the highest interest rate balance first. So, don’t let the emotions or psychology of it get in the way. That may be easy to say, but if it’s constantly on your mind try to find something else to think about, do not overthink the situation, and don’t get sidetracked. Attack the WF debt first and with laser focus! It will be gone before you know it.

    • Reply Ashley |

      Yeah, most of the time I don’t think about it. But I tend to pay our bills all at once and its when I’m looking at all the different debts together that its hardest. Luckily its just once a month and then I can put it out of my mind for another few weeks. : )

    • Reply Sara |

      Eh, I have to disagree with this. Yes, mathematically that’s what makes sense. But if it were that easy, you wouldn’t be struggling with it. Think about how you would feel if you paid off the other debt first.

      Which one would (hypothetically) make you feel best? I know it sounds corny, but being rational isn’t how to got into debt in the first place. You’ve got to do what feels best to let you emotionally make it until the end, or else the impulse to give up halfway there will increase. It’s a marathon with this much debt, and you’ve got to think about the long haul. Even if it’s going to cost you a few bucks in interest, maybe it would be smarter to tackle some of the lower hanging fruit first, so you feel jazzed about hanging in the game until the end.

      I’m also still paying off debt (so close I can taste it!), and I had two big debts – car and credit card. At the time, my credit card was higher, and I faithfully kept making large payments to it. But month after month, I just felt like this process was taking forever, and the feeling of being in debt was so scary and uncomfortable to me so I switched gears and started aggressively paying off my car first. It felt better, safer somehow. Why? I have no idea. Maybe the thought of only having one debt left, or that if something catastrophic happened I would still have transportation that I owned outright? I still have no idea why it felt right to take that path, but it did. And once my car loan was gone, I felt the end was so near that it doubled my resolve to get rid of the card debt.

      Definitely do what’s right for you, but don’t discount that maybe this internal struggle you’re having is trying to tell you something. It may be easier psychologically if you took another path to debt free. Hang in there!

  • Reply Juhli |

    I want to add that I know you have tons of self-discipline or you wouldn’t have finished your Ph.D. Think about how you did that and apply it to this situation.

  • Reply Mary |

    I understand what you are saying and it’s hard when you have a mountain of debt. What I hear you saying is that you want to get rid of a lot of these debts but you feel logically like you need to pay the highest interest first.

    I’d make a new list with all of the debt balances from lowest to highest. I’d break out those license fees that you mentioned so that if you only owed $250 on one balance, it would be easier to see.

    Off the top of my head, I’d probably do this….pay off the furniture loan first. Use this minimum payment and the minimum from the cc you just paid off and put that on your next credit card (the lower interest one). Throw any and all of your extra income from your job and anything else on that card. Once that is done, you’ll have a nice snowball to put on the higher interest credit card loan. Continue your goal to pay off all credit cards for 2014. For 2015, you can then tackle your license fees and get that out of the way before moving on to your other debt. Logically, yes, it makes sense to pay off the higher interest credit card however it will only take a few months if that to pay off that lower card and the momentum to have the furniture loan done and two credit cards will be huge! Also, with only the higher interest card left for the end of the year, you’ll have added momentum to pay that off by January 1, 2015.

    It would also be easier on your original debt list, to list all of your credit cards together, then all of the student loan debt, etc essentially, just group the like items. I still say it would be nice to have each blogger’s debt listed at the bottom of the post or somewhere so the reader doesn’t have to click on each blogger’s name and locate the original debt post.

  • Reply Ashley |

    I agree about having a debt list easily associated with each blogger. I think Jeffrey was trying to work on that (in the right column), but said the logistics would probably take a couple months to figure it all out.
    Regarding ordering of my debt list – I can group it by like-category if that is visually easier. Right now they’re ordered by APR, but that splits the categories up.

  • Reply Rebecca |

    Getting fed up is a huge part of dumping debt! For that reason I dont blame you for leveraging your emotion and attacking WF. But maybe you could also set a goal to knockout a little one like the mattress or a license portion each month so that you get the feeling of reducing the number of debts too. For me that was more motivating. It divides your focus a little bit but also gives you visible progress. Also, it would be bad if you got through then cc’s and then werent worried about the other small debts enough to follow through.

  • Reply Slinky |

    If it really bugs you then switch it up. It’s better to get something done than to never get there because you were trying to do it “the right way”.

    If it’s only bugging you when you make the payments, try sending out the WF payment first. Obviously, double check the math. That takes away the whole “I could pay more on this…” thinking and starts off the debt payments with the happy boost of a big payment made.

    My husband also made a list of charges on his card to cross off when he was paying his down. It worked really well. You could put a bunch of charges on a chart or chain and have all the satisfaction of crossing/cutting them off. Also, if you go this route, stack the deck in your favor and pick the charge you hate the most. And don’t put all the big amounts together. Mix it up a bit so that there’s always progress.

  • Reply Lynn |

    Why not combine the two? Make yourself a deal where your goal is to snowball a thousand dollars toward WF. Then switch and snowball on your lowest debt amount until paid off. Then go back to WF and knock off another thousand. This way you can serve both masters so to speak.

    It doesn’t have to be an either/or situation. It is more important that you structure your debt payoff in a way that keeps you motivated and on the right track than it is to follow some arbitrary rules. And as long as you are paying off debt, then you are on the right track no matter how you choose to do it.

  • Reply manda |

    Ugh!! It’s hard, I know. Maybe someone said this but I’d suggest you just put a post it over that interest rate and try to forget about it for now. Soon enough you’ll pay off the lower balance and move on to the higher-interest-card.

    Keep at it girl!

So, what do you think ?