I recently started the DOLP (Dead on Last Payment) and the way it works is you enter what you owe on each card, what the minimum payment due is each month and then you divide the amount owed by the payment due and that is the DOLP. Then you sort the DOLP by the lowest number first and that is the credit card you apply extra payments to each month while paying the minimum due to the rest of the forms. The idea is that you’ll pay off the lower DOLP cards quicker. My problem is that, some of the credit cards I have, if I pay only the minimum payment, then the balance goes up the next month. So, it all doesn’t make sense to me. Can someone help me with this please?
I know it is mentioned there, that¹s where I got the idea… But I’m asking in your forums because I thought someone could help me to understand why my other balances are going up when I pay the minimum amount due and should I pay more than the minimum amount due even though the DOLP says not to?
There is a website online that I read ab out in Readers Digest called debt goal. I did not sign up for anything it was free. What it did was show me with the interest rates that I plugged in how much I should pay on everything. It says to pay the minimum on the lowest rates and whatever you have towards your highest interest rate card. Have you stopped using the credit cards? What I never understood for a long time was that the credit cards had their interest calculated daily which caused me once I started using them to quickly snowball my way deeper into debt. We paid off one card and if I need to purchase something online I don’t unless I can transfer the cash out of my savings account. Then I pay that bill right away.
If you sign up for debt goal (not to pay bills on but just use their calculater) it will show you if you pay such and such what your amount will be and how quickley your total will decrease. My understanding is that there’s a flaw in the calculator in that it doesn’t calculate interest. So… I’ve pushed this before, but I’ll push it again.
The Rapid Debt Repayment Plan Calculator (at debtproofliving.com) is the best I’ve seen. It not only calculates your interest and gives you a payoff calendar, but it allows you to sort by either interest rate (highest to lowest), payoff amount (highest to lowest), or a manual sort of your choosing. It also will recalculate your interest and payoff date if you pay every two weeks. And it allows you to add a “booster” amount.
The only downside is the $29 annual fee for access to the web site, but you get a bunch of other stuff with that, and frankly, I think constant motivation is totally worth it. (carefully stepping down from soap box) Sorry for the enthusiasm. I just love having a tool that is accurate. It makes this whole process much more transparent and makes me more optimistic that I’m doing the best I can to get out of debt!