10 Types of Debt and the One Weird Trick to Wipe Each Out
Debt feels like a heavy blanket on a hot day. It’s suffocating, stressful, and makes every financial decision feel impossible. You’re not just fighting a number; you’re fighting anxiety, shame, and the feeling that you’ll never be free.
We hear the same old advice everywhere: “make a budget,” “stop buying coffee,” “use the avalanche method.” It’s good advice, but it’s noise. It misses the crucial secret: not all debt is created equal. Treating every debt the same is like using a hammer for every home repair—sometimes you need a screwdriver.
The real key to breaking free isn’t just working harder; it’s working smarter. It’s about knowing the one unique pressure point for each type of debt. That’s the “weird trick.” It’s not magic; it’s strategy.
Ready to feel the weight lift? Let’s dive into the 10 most common types of debt and the one unconventional yet powerful trick to dismantle each one for good.
10 Types of Debt and the One Weird Trick to Wipe Each Out
1. Credit Card Debt: The Silent Budget Killer
The Usual Advice: Transfer your balance to a 0% APR card or get a consolidation loan.
The One Weird Trick: The Mini-Budget Power-Up.
Forget trying to overhaul your entire life overnight. Instead, implement a weekly—not monthly—”mini-budget” for your frivolous spending (coffee, eating out, entertainment). Any cash left unspent in that weekly mini-budget immediately gets thrown as an extra payment at your credit card debt. Right then. Don’t wait.
Why it Works: This turns debt payoff from a distant, monthly chore into an immediate, winning game. That $12.73 you didn’t spend on Thursday? It becomes a tiny victory payment on Friday. These small, frequent wins build momentum and make you feel in control, which is the #1 factor in staying motivated. It’s psychological ju-jitsu against overspending.
2. Student Loan Debt: The Long Haul
The Usual Advice: Sign up for an income-driven repayment plan or just pay the minimum for 20 years.
The One Weird Trick: The Bi-Weekly Payment Switch.
You make payments monthly. Switch to making half your payment every two weeks. It sounds simple, but here’s the magic: there are 52 weeks in a year, which means you make 26 half-payments, or 13 full monthly payments instead of 12.
Why it Works: You make one extra full payment per year without even feeling it. On a 10-year, $50,000 loan at 6%, this simple switch can shave off about 2 years and save you over $4,000 in interest. It’s a set-it-and-forget-it trick that leverages timing to do the heavy lifting for you.
3. Mortgage Debt: The Giant
The Usual Advice: Make one extra payment a year.
The One Weird Trick: Round Up Your Payment (Dramatically).
Don’t just round up to the nearest $10. If your payment is $1,487.23, round up to $1,600 or even $1,700. This extra money is applied directly to your principal loan amount.
Why it Works: Because mortgage interest is calculated on the principal, every extra dollar you pay toward the principal reduces the interest you’ll pay for the entire life of the loan. An extra $200 a month on a $300,000, 30-year mortgage at 4% can cut the term by over 7 years and save you more than $50,000 in interest. It’s like giving your future self a massive raise.
4. Auto Loan Debt: The Depreciating Problem
The Usual Advice: Make extra payments when you can.
The One Weird Trick: Make Your First Payment Your Last Payment.
Here’s the weird part: Make a massive principal-only payment the very first month you have the loan. Call your lender, specify the payment is for “principal only,” and throw every spare dollar you have at it immediately.
Why it Works: Cars depreciate fastest in the first year. This initial payment attacks the loan before the majority of your monthly payments have even started covering principal (early payments are mostly interest). It immediately improves your loan-to-value ratio, potentially helping you avoid being “upside-down” on the loan. It sets a powerful trajectory from day one.
5. Medical Debt: The Unexpected Emergency
The Usual Advice: Put it on a payment plan.
The One Weird Trick: The Itemized Bill Audit.
Before you pay a single cent, you must request a fully itemized bill. You’d be shocked how often hospitals charge for things you never received—$50 for a box of tissues, $200 for “miscellaneous supplies,” or medication you never took.
Why it Works: This simple, formal request often triggers an internal audit. Billing departments, overwhelmed and prone to errors, would often rather remove a questionable charge than justify it. This isn’t negotiation; it’s fact-checking. It’s incredibly common for hundreds, even thousands, of dollars to simply vanish from the bill because they can’t account for them.
6. Personal Loan Debt: The Blank Check
The Usual Advice: Pay it off aggressively with the avalanche method.
The One Weird Trick: The “Found Money” Windfall Directive.
This requires discipline: Any time you receive unexpected money—a tax refund, a work bonus, a birthday check from grandma, even a $50 lottery scratch-off—you have a pre-made rule: 100% of it goes to the personal loan. No exceptions. No “I’ll just use half.”
Why it Works: Personal loans often have shorter terms, so a few large, unexpected injections of cash can dramatically shorten the loan’s life. This method uses money you weren’t counting on in your regular budget, so you don’t feel the pinch. It creates huge leaps in progress without impacting your daily life.
7. Payday Loan Debt: The Predatory Trap
The Usual Advice: (There often is no good advice, which is why it’s a trap).
The One Weird Trick: The Credit Union Lifeline.
This is the most important trick on the list. Walk into a local federal credit union and ask for a Small Dollar Loan (SDL). These are explicitly designed by the National Credit Union Administration (NCUA) to help people escape payday loans.
Why it Works: A payday loan can have an APR of 400%. A credit union SDL has a maximum APR of 28%. They will give you a loan to pay off the payday loan, and your new payment will be a fraction of the cost. It transforms an impossible, spiraling debt into a manageable, fixed-term one. It’s your escape hatch.
8. Tax Debt: The IRS Intimidation
The Usual Advice: Panic and avoid opening the mail.
The One Weird Trick: The “Currently Not Collectible” Hail Mary.
If you are truly in financial hardship (e.g., living paycheck-to-poverty-paycheck), you can call the IRS and request your account be placed in Currently Not Collectible (CNC) status. You must prove your necessary living expenses exceed your income.
Why it Works: While the debt isn’t forgiven, the IRS temporarily stops all collection actions—no more threatening letters, no wage garnishments, no bank levies. It gives you breathing room to get back on your feet. The debt still accrues penalties and interest, but it stops the immediate financial bleeding and emotional terror.
9. Business Debt: The Personal Risk
The Usual Advice: Pour more personal money into the business.
The One Weird Trick: The Strict “Profit-First” Allocation.
This is a mindset flip. Instead of: Sales – Expenses = Profit, you do: Sales – Profit = Expenses. The moment any revenue hits your account, you immediately allocate a small, predetermined percentage (e.g., 1-5%) to a separate account solely for debt repayment.
Why it Works: It makes debt payment a non-negotiable top-line expense, not a leftover afterthought. This ensures you are consistently chipping away at the debt with every single sale, building momentum and preventing the debt balloon from getting larger. It creates a habit of fiscal responsibility that protects both your business and your personal assets.
10. “Buy Now, Pay Later” (BNPL) Debt: The Invisible Leak
The Usual Advice: Just keep track of your payments.
The One Weird Trick: The “BNPL Consolidation” Box.
BNPL plans are dangerous because they’re scattered and feel small. The trick? Treat them like a single, consolidated loan. Add up the total remaining debt across all platforms (Klarna, Afterpay, Affirm). Now, add up the total of all your minimum monthly payments. Now, attack this imaginary “consolidated loan” with the debt avalanche or snowball method.
Why it Works: This mental shift makes the invisible visible. You stop seeing four manageable $40 payments and start seeing one dangerous $160 monthly obligation. This clarity often shocks people into action, motivating them to pause using BNPL and focus on eliminating this consolidated balance with intense focus.
Your Freedom is a Strategy Away ( 10 Types of Debt and the One Weird Trick to Wipe Each Out)
Debt freedom isn’t about being a math genius or a monk who never spends a dollar. It’s about understanding the opponent. Each type of debt has a weakness—a weird trick that makes it vulnerable.
The common thread through all these tricks? Proactive, intentional action. It’s about making one phone call, auditing one bill, or tweaking one payment schedule. These are not massive life overhauls; they are precise, strategic moves.
Choose one debt—the one that causes you the most stress—and apply its “weird trick” this week. That first step, that first tiny victory, is how you change everything. The weight of debt is real, but you are stronger. Now you have the tools to prove it.
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Read More: The “Irregular Income” Hack That Crushes Debt Faster
My name is Rohit Vagh and I’m a content writer specializing in fashion and lifestyle. I have three years of experience in this field and have written various articles. My writing style is creative and engaging, and I strive to create content that resonates with my readers. I have a deep passion for fashion and am constantly researching the latest trends and styles to make sure my readers are up to date. I’m excited to continue my career in blogging, and I’m always looking for new opportunities in the fashion and lifestyle space.
