This repayment hack could help you knock out credit-card debt faster

  • Forget that minimum monthly payment. A forthcoming study finds consumers paid off more of their monthly credit card balance when given the chance to target specific purchases on their statement for repayment.
  • But experts say there aren’t many tools to do that directly through your credit card issuer.
  • A DIY approach would require splitting how you pay for your purchases.

Taking a closer look at your credit card statement could help you dig out of debt faster.

Consumers paid off more of their monthly credit card balance — and whittled down big debts faster — when given the chance to target specific purchases on their statement for repayment, compared to when only offered typical repayment options such as making the minimum payment. In other words, instead of plunking down the minimum $50, you might nix all your Uber rides, that new pair of sneakers and last week’s happy hour tab.

That’s according to a forthcoming study from researchers at Ohio State University, Harvard Business School, University of Pittsburgh and the Yale School of Management.


Think of “repayment-by-purchase” as a budget reckoning.

The lag time between a purchase and receiving a credit card statement in the mail makes it easy to forget how many times you’ve pulled out that card, and for what, said Grant E. Donnelly, the paper’s lead author and an assistant professor of marketing at Ohio State University. Assessing individual purchases within that larger balance prompts consumers to evaluate what they spent, he said, and to think about what expenses are being left uncovered to accrue interest.

“It seems to change the experience of how people pay that bill,” he said. Instead of anchoring on the monthly minimum, “They look to an item and say, ‘Well, can I pay that off?'”

“What does that $50 repayment mean to you?” Donnelly said. “A pair of shoes, or two dinners out?”


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