High-interest debt—especially credit card debt—can be one of the most frustrating financial hurdles. You’re making payments every month, but the balance barely moves. If you’ve ever felt like you’re doing all the right things and still not making progress, you’re not alone.

Let’s look at a story that’s all too common—and what we can learn from it.

📖 The Story

I recently met with someone who owed $16,000 in credit card debt at 20% interest. They were paying $300 each month, hoping to chip away at it.

But here’s what they discovered: only about $60 of that payment went toward reducing their balance. The other $240? That went to interest. Over the course of a year, they had paid $3,600 in interest—while their debt only decreased by about $720.

That’s the power (and pain) of compounding interest—working against you instead of for you.

🤔 Why This Happens

Credit card interest doesn’t just apply to the original amount you owe—it compounds monthly, sometimes even daily. That means interest can be charged on interest, not just your purchase.

If you’re only making minimum payments—or just slightly more—you may feel stuck. But understanding how this system works is the first step toward taking back control.

🛠️ What You Can Do

Here are a few practical strategies that could help reduce your debt load more efficiently:

1. Know Where You Stand

List all your debts, their interest rates, and minimum payments. Awareness is the first step.

2. Focus on High-Interest Debt

The debt avalanche method prioritizes paying off the debt with the highest interest rate first—often saving the most in the long run.

Alternatively, the debt snowball method focuses on paying off the smallest balances first for motivational wins. Choose the approach that works best for your mindset.

3. Talk to Your Creditors

You can call your credit card provider to ask for a lower interest rate. They may not always say yes, but it doesn’t hurt to ask.

4. Explore Consolidation Options

Some people consider options like personal loans or balance transfers with promotional interest rates. These options can sometimes reduce the cost of borrowing—but it’s important to understand all the terms and conditions involved. Speak with a licensed financial professional for guidance.

5. Increase Your Payments (If You Can)

Even an extra $50 to $100 per month can make a meaningful difference over time by reducing interest and accelerating payoff.

🔄 A New Direction Is Possible

The person I met started feeling overwhelmed. But with small, consistent changes, they began to make meaningful progress. It wasn’t instant—but they moved from feeling stuck to feeling empowered.

If you’re carrying high-interest debt, you’re not alone—and you’re not out of options. The key is to take action, even if it’s just one step at a time.

🎯 Want to Talk Strategy?

At Arlene Financial, we’re here to help you explore strategies for managing debt within a broader financial plan. Let’s look at your goals and build a realistic, achievable roadmap—one that reflects your unique situation.

📅 Book a no-cost consultation here

Disclaimers

World Financial Group (WFG) is a financial services marketing company whose affiliates offer a broad array of financial products and services. World Financial Group Insurance Agency of Canada Inc. (WFGIA) offers life insurance and segregated funds. WFG Securities Inc. offers mutual funds.
WFG, WFGIA and WFGS are affiliated companies.
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This material is intended for educational purposes only. It should not be considered tax, legal, or debt counseling advice. Please consult your own qualified financial, legal, or credit professional before making any financial decisions. Results may vary based on individual circumstances.