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DOLP™: Done On Last Payment

DOLP™ = Done On Last Payment

If you owe money on more than one credit card, here’s my system to prioritize your debt. DOLP™ is designed to establish the most effective and efficient order in which you should pay down your various cards. The DOLP™ system works by identifying the card you can pay off most quickly and then having you pay it off first. The point of doing this is to reduce the number of different cards you owe money on as fast as possible.

This is super important because the more balances you carry, the greater the chance that you will miss a payment or go over a credit limit—and get hit with a huge penalty. The fact is, a card with even a small balance can cost you a fortune. If you miss a payment on an account with a $500 balance, the late fee could be as much as $50. If you exceed your credit limit at the same time, the fee could be $100. This is why credit cards with small balances are as dangerous as big ones.

DOLPing Your Way Out of Debt

1. Pull Out Your Credit Card Statements And Get Them Organized

Pull out your credit card statements and get them organized in file folders.

2. Download the DOLP™ Worksheet Or Use Our Interactive Tool Above

Download the DOLP™ worksheet and fill it out or use our interactive tool above. Simply enter the name of the account, the outstanding balance you owe, the minimum monthly payment, and the payment due date. (For now, don’t worry about the DOLP™ number and the DOLP™ ranking.)

3. Calculate Each Account’s DOLP™ Number

Calculate each account’s DOLP™ number. You calculate it by dividing the outstanding balance by the minimum monthly payment. (For example, say you owe $1,000 on your Visa card and the minimum monthly payment is $50. Dividing $1,000 by $50 gives you a DOLP™ number of 20. Do this for all of your credit card accounts.)

4. Assign a DOLP™ Ranking To Each Account

Assign a DOLP™ ranking to each account. The account with the lowest DOLP™ number is ranked #1. The account with the second-lowest number is #2. And so on.

5. Calendar The Due Dates

Calendar the due dates. Enter the payment due dates for all your credit accounts in your computer’s calendar system. Set your calendar software to remind you of each due date at least five days in advance so you don’t make any late payments and get hit with costly late fees and penalties.

6. Start Paying Down Your Debt -- The DOLP™ Way

Start paying down your debt -- the DOLP™ way. Each month, as the payment due dates approach, make the minimum payment on every account…EXCEPT for the one with the #1 DOLP™ ranking. For that card, make as big a payment as you can manage. Ideally, your payment should be at least double the minimum. (Hopefully, finding your Latte Factor will make it easier to come up with the extra money you will need for this.) Once a card has been paid off entirely, you retire it and start paying down the card with the #2 DOLP™ ranking.


DOLP™ Resources