Aug 10 2009

The Infomercial Copycat Method of Debt Reduction

informercial debt method copy

This method of debt reduction is not some extravagant new idea nor is it miracle work. It employs the same tactics that businesses use to make you more likely to spend money.

The essence of how it works is that it builds the psychological momentum and confidence that many consumers lack when they are reluctant to repay their loans. This method of debt repayment mimics the process that a customer undergoes to buy a product often seen in an infomercial.

The common strategies are:

  • Breaking into multiple payments. You always hear, “Get this for only 4 easy payments of $19.99″. They don’t want you to see what you are actually paying. The whole point is tricking you into not knowing how much you’ll end up spending. The total payment of $80 plus taxes and shipping will not show up anywhere in your bills.
  • Create the illusion of a smaller amount through the use of many “9”s. Seeing a smaller first digit just makes the number look smaller. The difference between $20.01 and $19.99 may only be two pennies, but people feel much more comfortable with paying $19.99, psychologically.
  • Create the illusion of a smaller amount through the use of fewer digits. This is very much like the tactic above. It works on the premise that fewer numbers means less money. Once again, it makes a customer feel that paying $999 a less overwhelming than $1,000.

The Infomercial Copycat

  1. Take the balance of your current credit card statement and divide it by the maximum number of online payments per billing cycle that is allowed by your credit card company.
  2. Round up to the nearest $10 if your statement balance is less than $400. Round up to the nearest $100 if your statement balance is $400 or more.
  3. If your mini-payment is $100 or less, subtract $0.01 from that amount. If your mini-payment is more than $100, subtract $1 from that amount.
  4. Divide the calendar month by the number of maximum payments per billing cycle. This gives you the days on which you will make the mini-payments.
  5. Set up reminders and make the payments as scheduled.

Here is an example of how the Infomercial Copycat should look like:


Why It Works

Besides being a financial burden, debt also has a major psychological impact. The Infomercial Copycat changes nothing about your financial situation but it will do wonders for your morale. You will feel like debt has less of a strangle on you. When you do something and it doesn’t feel too bad after you do it, you are less afraid of it the next time. This is the drive and momentum that this method is trying to instill.

If you look once again at the image at the top of this article, it is more comforting to see your debt as four parts of $49.99 each than a whole $200. If you agree with the previous statement, then you should definitely give the Infomercial Copycat method of debt reduction a try. I know it will work because I use it!

I suggest everyone to use this method except for those who are truly unable to make the mini-payments as scheduled. Because it requires that you stick to the schedule and not miss a mini-payment after the first one. It is, without a doubt, a more tedious method of debt repayment but you will feel the relief when that bill is paid.

Also, the Infomercial Copycat method works in tandem with other popular debt reduction techniques such as the Debt Snowball and the Debt Avalanche.

So, no matter who you are, as long as you have credit card debt, you can give it a try. Let me know whether or not it has worked for you.

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10 Comments on this post


  1. Carnival of Personal Finance #218 : Carnival of Personal Finance wrote:

    [...] Realm of Prosperity: The Infomercial Copycat Method of Debt Reduction [...]

    August 17th, 2009 at 11:21 am
  2. Monetary Psychology | Beyond Paycheck to Paycheck wrote:

    [...] I just finished breezing through this week’s carnival of personal finance, which featured my Negotiate your cable bill – How I lowered my cable bill. A great article which takes the ups and downs of psychology and decision-making to a most humorous yet effective level is Realm of Prosperity’s The Infomercial Copycat Method of Debt Reduction. [...]

    August 17th, 2009 at 3:28 pm
  3. Coupons, Discounts, and Sales Do Not Mean You Are Saving | Realm of Prosperity wrote:

    [...] like my proposed Infomercial Copycat method of debt reduction, coupons, discounts, and sales provide the feeling that you are losing money in tiny amounts so [...]

    October 23rd, 2009 at 8:49 am
  4. Larger Bills Get Less Action | Realm of Prosperity wrote:

    [...] similar to the concept behind the Infomercial Copycat method of debt reduction, we are more comfortable with parting ways with smaller amounts of money than larger [...]

    January 5th, 2010 at 9:21 pm
  5. Carnival of Personal Finance #285 – Google Search Money Stories Edition | Realm of Prosperity wrote:

    [...] to tell a story. And once in a while, I like to take things in a creative direction (check out this funky post). So, I’ve created three personal finance-related Google Search stories for your enjoyment as [...]

    November 29th, 2010 at 8:34 am
  1. Flexo said:

    This is awesome! Such a great idea.

    August 11th, 2009 at 11:33 pm
  2. J. Money said:

    Yes! Absolutely brilliant – love it. Esp with the purrty pics and examples ;) keeps my A.D.D. levels down.

    August 15th, 2009 at 10:20 am
  3. Beyond Paycheck to Paycheck said:

    Great post – love the image atop the post too!

    August 17th, 2009 at 2:57 pm
  4. Neil said:

    While this isn’t a terrible idea if you are having difficulty wrapping your head around paying $2000 in one pop to pay off your credit card, it’s not really sound financial advice.

    Credit cards – provided you actually pay the whole bill every month – are an interest free loan. You can profit (marginally these days, unfortunately) by hanging onto your cash as long as possible and putting it in an interest bearing account. Your smaller payments
    concept reduces the amount of time you’re in control of your money.

    Of course, if these payments are going to a card that you are paying interest on, there are real savings to paying earlier, so the opposite dynamic applies. Still, you should pay as much as possible instead of picking an arbitrary number because it’s psychologically pleasing.

    And maybe it’s just me, but I never got the psychological effect. When I see a number ending in 9, it gets rounded up in my head.

    August 18th, 2009 at 4:25 pm
  5. American Banking News said:

    Haha, I love the infographic. Nice work.

    August 19th, 2009 at 6:38 pm


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