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How to Pay Off Debt Using the Lasso Method

5 minute read

Rebecca Henderson

By Rebecca Henderson

You’ve heard plenty about the avalanche and snowball methods for paying off debt. They definitely have their merits. But don’t get buried in calculations or smacked in the face with a bunch of little debts that gang up on your savings. Instead, use the lasso method. It will wrangle your debt and put yourself on the path towards a future the cowboys of the Wild West dreamed of centuries ago. All horsing around aside, the lasso method can help you achieve debt-free living when done correctly.

If you’re looking for ways to dig yourself out of debt and start building some savings, the lasso method might just be your ticket. Listen closely, stick to the following steps carefully, and you could come out of this with a gold rush —and good credit, to boot.

What is the Lasso Method?

Made popular by the Debt Free Guys, the lasso method saved John and David from drowning in debt. This particular method focuses on “the number one thing that is preventing you from paying off your debt faster. Your interest rate.” The idea is to curtail your interest rate payments over time as you pay your debt down.

Transferring debt from a high-interest credit card to a low(er)-interest one is the name of the game with the lasso method. This practice buys you time to pay off the full balance of your debt without being overwhelmed by the interest that piles up. Be warned, though, because it takes some effort. You’ll have to read through a lot of fine print search for credit card offers with no annual fees (ideally). However, if you can pull it off, the lasso method could be the debt-eradicating method you’re looking for.

Is the Lasso Method Right For You?

The lasso method isn’t the answer to everyone’s problems. For example, if you owe more than twice your annual income in credit card debt, the lasso method won’t help you much. You’re also going to have to lock up those credit cards while you’re committed to the lasso method. If you’re living off those cards right now due to the pandemic, this method probably isn’t for you.

Who Should Take Advantage of the Lasso Method?

If you owe less in credit card debt than you make annually, the lasso method is a viable option. The same can be said for those who can’t pay off their credit card debt in six months or less. Though the lasso method is meant to cut down on the interest charges you accrue over time, extending the time frame in which you have to pay back your debt is really what the lasso method is all about.

How to Successfully Implement the Lasso Method

If you’ve determined this debt-reduction method is right for you, great! Here are the steps you can take to implementing the lasso method and moving towards a debt-free life:


The first step might be the hardest for some. It means locking up your credit cards. Seriously, stop using them. Cut them up if you have to. Only use the funds available to you right now for future purchases. The goal is to limit your debt to what it is now. You don’t want it to get any higher. And you simple can’t keep chasing it down month after month as you accrue new charges. Make a commitment to only pay for what you need each month. That may require coming up with a new budget. Just remember how good it will feel to live debt-free once it’s all over.


Seek out credit card offers of 0% interest (whenever possible). These will most likely always be balance transfer offers. These offers will give you the most time and leeway to pay down your debt. If you’re struggling to find those, call your credit card company directly. Ask for a better rate. You can even bluff a little, and tell them that you’re considering a balance transfer and closing that card for good. It’s really that easy. Just be aware that some companies may be willing to bend a little, while others may not. It’s still worth taking the time to inquire about a lower rate, even if it’s just to mark that step off your to-do list.


The lasso method does require you to do a bit of math. “Keep in mind, you may pay a fee of 1-5% for the transfer. This needs to be added into your calculations,” reminds Think of it as an administrative fee the banks charge in order to move around your debt for you. Each balance transfer offer will come with its own terms, so make sure you read the fine print. Incorporate any associated fee into your costs.


Oftentimes, coming by an ideal balance transfer offer won’t be an easy task. Or your credit score could be standing in the way of your success. In those cases, consider a personal loan instead. It’s another great way to consolidate your debt into one easy payment. Plus, you’ll likely be able to take advantage of a smaller rate when it comes to interest payments.

Before you take off to call your credit card company, there are a few helpful tips and reminders that will set you up for further success. Keep reading if you want to maximize your returns, while minimizing your costs.

Get the Most Out of Your New Debt Reduction Plan

Now that you’ve got a game plan together, know that your financial future depends on what you do next. Keep in mind that higher balances and/or higher interest rates come first. They will do the most damage if not attended to quickly. You need to mitigate that high-risk debt first.

You should look into automated payments. Having the money come directly out of your account may be painful to watch, but it’ll also help you keep current on payments. All the same, you should also know what will happen if you miss a payment or are late. Those lapses may cause you to become ineligible for promotions. There’s no sense taking a low interest balance transfer if you lose the rate by missing a payment. Chat with a representative if you’re not sure about eligibility and requirements.

Finally, keep those credit cards open after you pay them off. This is huge! You might thinking terminating the account is a smart move, but credit scores are a funny thing. If you do, you’ll lose the credit history you’ve been working to build so diligently. Your credit score will take a hit if you close the account. The best bet is to just tuck that card away in the back of your sock drawer — for emergencies only. At the same time, be sure you’re not running up that tab again. Otherwise you’ll find yourself having to start this process all over again.

The First Step on the Road to Financial Success

The lasso method will not only help you rope in your debt. It will also force you to implement good money-handling habits, that will benefit your future from the very beginning. You’ll save hundreds (or thousands) on interest fees, plus develop better credit card discipline. That’s all there is to it!

Now, the lasso method isn’t for everyone. However, it can help you consolidate your debts into lower interest payments. Then you can manage them effectively as you work to pay them off. Its true that it will take a lot of homework and some serious discipline. But just think about how good it will feel to be debt-free and on your own terms. And that is truly financial freedom.

Good luck lassoing!

Man Lassoing a Hundred Dollar BillShutterstock
Rebecca Henderson

Freelance Writer

Rebecca Henderson has a Master's in German and a Bachelor's in Creative Writing. She alternates her time between writing and working on a variety of motorized projects. Most recently, she and her boyfriend have been building a custom drift trike. Rebecca believes that language, love, and a life worth living are only the first ingredients to happiness.


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