How to Pay Off Debt in Singapore: Kill the Most Expensive First

A balance sitting on a credit card at 27% a year is the single most expensive money in your life. More expensive than your mortgage, more expensive than your car loan, more expensive than almost anything you will ever borrow. And it rarely feels that way, because it arrived quietly, one reasonable-seeming purchase at a time, and now it just sits there, growing in the background while you are not looking.

We have spent five days building the saving side of your money system. Today we deal with the side that can silently undo all of it, because there is no point earning a few percent on your savings while a card charges you 27% on your debt.

The short version: list every debt you have with its balance and its interest rate, then throw every spare dollar at the highest-rate one while paying the minimum on the rest. In Singapore the top of that list is almost always a credit card, at around 26% to 28% a year. Clearing it is, quite literally, a guaranteed return that no safe investment on earth can match.

This is also the most honest example of how I actually work. Before I would ever talk to you about buying a single product, I want to see what you owe, because for most people, clearing the right debt beats anything I could sell them.

Step one: drag every debt into the light

You cannot manage, or even feel the true size of, a debt you have never laid out in one place.

Same move as the spending audit. Write down every debt, and for each, just two numbers: the outstanding balance and the interest rate.

• Credit cards
• Buy-now-pay-later balances
• Study loans
• Car loans
• Renovation or personal loans

Be especially, ruthlessly honest about buy-now-pay-later. It is engineered to feel free, which makes it the easiest debt to undercount and the easiest to let pile up across a dozen apps and checkouts. Add every cent of it in.

Step two: attack the most expensive first

Now circle the debt with the highest interest rate. That is target number one. You pay only the minimum on everything else, and you throw every spare dollar you can find at that single most expensive balance until it is dead, then you move to the next highest, and the next. This is the avalanche method, and it is not a personality choice. It is arithmetic: clearing the highest rate first means you hand over the least total interest. Full stop.

To see why the rate matters so much more than the balance, look at the real annual cost of carrying a card.

Credit card balance

S$5,000

Card interest at ~27% a year

S$1,350 / year

Same S$5,000 in savings at ~3%

S$150 / year

Clearing the card vs holding the cash

~S$1,200 / year better off

Illustrative rates; SG cards typically run ~26-28% a year. Paying off the card is a guaranteed, risk-free ~27% return. No safe investment reliably matches that.

The reframe that changes everything: clearing debt is investing

This is the insight I most want you to take from today, because it quietly rewires how you think about every spare dollar.

Paying off a card charging 27% is not “just being responsible.” It is earning a guaranteed, tax-free, risk-free 27% return on that money. There is no legal investment that reliably pays 27% with zero risk. None. The best investors in the world celebrate a steady 10% over time. So when your money sits in a savings account earning a few percent while a card charges you 27%, the maths is quietly screaming at you. The single highest-return move available to you is not some clever fund. It is sitting in your own credit card statement, waiting.

So before anyone, me included, talks to you about chasing returns out in the market, the first question is always the same: is there expensive debt to kill first? Almost always, that is where the real money is.

What it looked like for Faizal

Faizal, 38, runs his own business, and like a lot of business owners his income swings from feast to famine month to month. He was carrying S$8,000 on a credit card at about 27% a year. And here is the part so common it is almost a rule: at the same time, he was sitting on a healthy pile of cash in a savings account earning next to nothing, keeping it there “just in case,” because the irregular income made him anxious.

It felt prudent. It was costing him real money every month. When we laid the two side by side, the idle cash earning a fraction of a percent next to the card charging 27%, the picture was undeniable. He was effectively borrowing his own money back at 27%. We kept a sensible working buffer to handle his lumpy income, then used the rest to kill the card completely before he put another cent toward investing. The maths made the decision for him. And the part he did not expect was the feeling: not having that balance hanging over him, not feeding it every month, freed up something that was not only financial.

You can be debt-aware without being debt-ashamed

One last thing, because shame keeps more people stuck in expensive debt than maths ever does.

Carrying a card balance does not make you irresponsible or stupid. It makes you a normal person living in an expensive city where credit is handed out like sweets and the costs are buried in fine print almost nobody reads. The avalanche method works precisely because it takes the emotion out of it. You are not punishing yourself. You are running a cold, clear, profitable sequence: highest rate first, guaranteed return banked, repeat. Treat it like the smartest trade you will make this year, because it probably is.

Do this today

1. 1

   List every debt with its balance and interest rate.

   You cannot beat what you have not laid out in front of you.

2. 2

   Circle the highest-rate one.

   That is the most expensive money you owe, so every extra dollar works hardest there.

3. 3

   Decide the extra you will throw at it this month, paying minimums on the rest.

   Clearing a 27% card is a guaranteed 27% return, the best you will get all year.

Quick self-audit: dig out your latest credit card statement and actually read two things: the real interest rate (the EIR) and the small “minimum payment” warning box that shows how long you would take to clear the balance paying only the minimum. Most people have never read either, once. It is sobering, and it is motivating.

Tomorrow we close the loop on your whole money system with a simple monthly habit, and a hunt for the government money you may already be owed and never claimed.

If you want help building a payoff order around your actual cashflow, especially if your income is irregular like Faizal’s, that is exactly what a Free Financial Health Check is for. Message me, and I reply.