The Kamikaze Method is a way to pay off your credit cards quickly and easily. It is a brutal full frontal attack that eliminates debt but it has a few caveats and it will not work for everyone. I will discuss several methods here and leave it for the readers to determine what, if any, are right for them.
How in debt are you?
If you are using your credit cards to pay for necessities and only paying the minimums then the problem is already critical and it is only a matter of time before you reach the maximum limit anyone is going to loan you and are fucked. Let’s go over the Nuclear Option first. Bankruptcy is something that everyone is going to tell you to consider last but I’m going to tell you to go for first. It will destroy your credit rating but, let’s face it, the last thing you need is more credit. You won’t be able to get a house or new car for many years, but you will be debt free. The only true negative here is that your credit rating can keep you from landing a job with employers that check for that. Still, if you are under a mountain of debt, it is an option. Get a bankruptcy lawyer and pay them with your credit card.
Let’s cover the most well known methods for eliminating credit card debt.
Is she using a mechanical paper calculator? What is she, Amish?
Debt Snowball Method:
The Pitch:
Pay off your accounts with the smaller balances first, proceeding to the larger ones later, causing a snowball effect. This is supposed to create a good mental attitude because as you pay off each account your spirits are lifted and all that good mental energy goes towards paying off the next one. Sounds easy, right?
The Reality:
If you believe that then I have a unicorns that shit gum drop trees and pixie dust for sale. It makes sense to tackle the smaller problem first because that one seems actually doable and the larger ones seem insurmountable. But as you are paying off the first card those big balances keep getting bigger. By the time you pay off the first card the interest on all of your other cards could be greater then the principal you just paid! Now I know you can swap debt from one card to another so that your smallest balance is on the card with the highest APR, then you pay off that card and then transfer a small amount from your lower APR cards onto your higher one and etc etc. But that isn’t what’s going to happen and you know it. You know you are bad with debt and now you think you can play duck-duck-goose with your cards and juggle all of that without incurring any fees? Have fun with that.
Cherry flavored debt.
Snowflake Method:
The Pitch:
Take every small bit of money you can find and put it towards your credit card. Dig through your coach, have a yard sale! Every little bit helps!
The Reality:
How are you going to get that money to the credit card company? Are you going to dig through your couch, have a yard sale and then take that money to the bank and then send it to them? Are you going to take it to 7-11 and get a money order for 35 cents and then mail it to them for another 44 cents? Really? Most credit card companies have a maximum number of times they will accept payments in a month. Mine is 4. So 4 days into the snowflake method and I have paid 14 dollars and now I have to wait 17-26 more business days to make another payment. The snowflake method has the right idea but just like Vegas casinos noticing that people can kind-of win at blackjack and taking steps to prevent it your credit card companies are wise to smart-ass payment strategies and will actively move to prevent them.
It's beginning to look a lot like Christmas Debt.
The Kamikaze Method:
This takes the Snowflake Method adds the Snowball Method effect and modernizes it. It also adds a batshit crazy mentality towards risk aversion as well. It works though. I paid off over 40 thousand dollars in debt in just over a year and I am debt free now.
You can certainly try this. It won’t work, but go ahead and have fun. Call your credit card company and ask for a lower rate. Tell them a sob story and that you won’t be able to continue to be a loyal customer of theirs if your rate stays where it is. Really lay on the tears and pretend like this is your big performance for the Oscar! They will tell you to go suck a bag of dicks. You see, they don’t care. They are losing money hand over fist because they gave out all that cheap credit to anyone with a pulse for the past 2 decades and now that the jig is up they will not budge. They are awash in a sea of red ink and they have an army of phone operators trained to say “no” faster than your ex-girlfriend. Still, go ahead and give them a call. Maybe you are a better actor than me and can get a few percent removed.
Make your own 80s phone joke here.
Why do you have a Netflix account and cable and an overdue Blockbuster rental? You can watch anything you want online and yet you want to flip through 1000 channels of nothing for over a hundred bucks a month. Cancel everything you don’t need. Cable, land lines, your maid, that mobile pet washing service that comes by once a month. If you can negotiate a cheaper deal for your cell phone then do it. Call up your insurance provider and get the cheapest rate you can. Starbucks coffee?! What are you, rich? Jesus Christ on a pogo stick go to 7-11 for your java or just get some at work. Take active steps to not spend one dime if you can.
Take all of your possessions and sell them. Yard sale, ebay, whatever. Sell your books and then the bookshelves, sell your television and your DVDs. All of it. This is a going out of business sale. You’re Crazy Eddy and your prices are INSANE! Now take that money and apply it to your card.
A metaphor for selling out. I'm being SUBTLE.
Yay, you get to be 13 again! Lucky you, you get to re-experience the joys that youth has to offer. That means you also get an allowance and when that money is gone that’s it, the fun is over. Calculate what it takes for you to live for a month and that gets to be your allowance. This allowance is for the bare necessities and for entertainment. That’s gas, food, movies and cigarettes for me which amounted to 300 dollars a month. Yours may be more or less. The deal is to pick a number and stick with it until everything is paid off.
Take what you have in savings and dump it into that money hole you have at Citibank or Chase. You were saving it for a rainy day? Oh, guess what, it’s pouring outside. “But what about emergencies?” I hear you asking. This is an emergency, once those credit cards fill up and they won’t give you any more extensions what do you think is going to happen. They aren’t coming over to give you a prize. Besides, you were just going to blow it on something stupid anyway so into the credit card maw of doom it goes.
You load 16k and what do you get?
- Find the maximum payment count
Find out the maximum number of times you can pay in a month. Now multiple that by 1 because that’s how many times you are going to pay. See, I’m keeping the math simple. Credit card companies calculate the interest that you owe them on a daily basis and then apply it your bill at the end of the month. So it’s better to pay more often than just once. If Jill pays 100 dollars a week for 4 weeks and John pays 400 dollars once a month and their credit card debt is 1000 dollars who pays less in interest? I’ll give you a hint: the one with the vagina.
Now you need to pick your highest interest account and move as much of the debt off of it to other lower interest cards. Take all of the money you have earned, subtract bills along with the minimum payments to all of your other cards and your allowance and that is the amount you are going to pay. You will want to divide it up and pay the maximum times you can that month. Repeat every month.
A banzai of savings.
That’s it.
This method is simple and it works. The highest interest card falls first followed by the lower ones in a domino effect. As each card is eliminated their bills disappear and even greater amounts can be applied to the the remaining debt.
