Turns out that almost half of american families need help with credit card debt. Approximately 47% of households carry at least some amount of credit card debt on a monthly basis. Can you guess what the average amount credit card debit is?
Above $1,000? Above $2,000? Or above $5,000? Would you believe it’s above $10,000?
The average amount of credit card debt for an indebted american family is $15,611*. That’s the AVERAGE credit card debt! That means that for every family with $1,000 in credit card debt there is another family with $30,000!
At 15% to 20% interest that amounts to $2,300 to $3,100 in extra charges each year for the average indebted american family. Ouch!
These families need help with credit card debt and we’ve got 15 great debt busting strategies.
15 Debt Busting Strategies To Help With Credit Card Debt!
1. Balance Transfer Credit Cards
Balance transfer credit cards offer interest rates that are low or even zero for a period of time. This is perfect for avoiding interest charges and paying down credit card debt fast. Just make sure that with the transfer fees and the new interest rate you actually come out ahead. Find the best credit card in Canada for balance transfers.
2. Improve Your FICO Score
Having a better FICO score means that you can get a lower interest rate on your credit card. This can make a big difference. Going from 20% to 10% interest will save the average american family $1,500 per year. FICO scores are based on a few factors like credit history, on time payments & credit utilization (how much you use out of your total credit line). Check your credit for free each year. Make sure any errors are removed because this can be dragging down your score.
3. Bank Loan
Getting a debt consolidation loan from a bank or credit union can help eliminate credit card debt faster. The reduced interest charges will go straight to principle. Go into your local bank branch and talk them about a credit card consolidation loan.
4. Peer-To-Peer Loan
Banks and credit unions aren’t the only option. There are now peer-to-peer lenders like Prosper that arrange loans from one individual to another. Usually loans are split into many chunks to reduce the risk of default. Credit card consolidation loans are common ones on peer-to-peer lending sites.
5. Donate Blood For Money
Making a bit of extra money by donating blood could help the average american family eliminate their credit card debt in just 3 years. At $25 – $50 per donation thats up to $5,000 per year from donating blood.
6. Make Extra Money
There are lots of ways to make an extra buck. Use this extra money to help with your credit card debt. Start an easy small business. Sell bottles of water in the summer. Sell glow sticks at festivals. Try doing some seasonal work like raking leaves or lawn maintenance. Or maybe baby sit for a local family…. etc etc
7. Get A Rate Reduction
Call your bank. Explain your situation. Then ask for a reduction in the interest rate being charged. Even a few percent will make a big difference over the long run. Don’t get a reduction? Try again in 6 months.
8. Create A Cash Budget
Cash budgeting works well for me. It’s much easier to see where money is going and how much is left. Most big bills go through automatic payment but small things like groceries, take out & clothing are all done in cash and have a strict monthly budget.
9. Cut Other Expenses
After you create your cash budget take a look at your spending and see where reductions can be made. For example, when I wanted to save more money each month I started to bike to work. This reduced my travel costs and I was able to cancel my gym membership. Five years later I’m still biking! This small change helped me save $2,000+ per year.
10. Sell Stuff On Craigslist
Before my daughter arrived my wife and I were amazed at how much junk we were able to clear out of our house. We made over $1,000 selling our old stuff on Craigslist. Every dollar counts and this is a great way to cut down credit card debt.
11. Put Credit Cards On Ice
Getting help with credit card debt means nothing if you cant control your spending. One strategy that’s worked well is to put your credit cards on ice. Freeze them in a block of water in your freezer and keep them only for emergencies.
12. Enrol In a Debt Management Plan
By working with a credit councillor you may need to enrol in a debt management plan. In this plan you give money each month to a credit counselling organization and they in turn pay your creditors based on a plan that they negotiate. This could help reduce monthly payments and interest rates. Make sure you sign up with an agency with a solid record/reviews.
13. Avoid Late Fees By Making Minimum Payments
One of the worst things someone with a lot of credit card debt can do is forget to make the minimum payment. This leads to additional fees and higher interest rates. It’s best to pay the minimum on all your cards each month before putting extra against any one card.
14. Get Help Paying Bills
If your income is low enough you may qualify for help with your bills. You can get help with your phone bill, help with your heating/electricity bills and also with rent. This extra money can help free up cash to put towards your credit card debt.
15. Make Money Online
Make a bit of money online and put it towards your monthly payment. Using sites like Swagbucks, Mechanical Turk or Clickworker you can make money online. Sites like Swagbucks will pay you small amounts for doing things you already do online like searching, playing games and watching videos. Mechanical Turk and Clickworker pay you based on small tasks that you perform. They could be anywhere from a few seconds to a few minutes long. Each task pays a small amount but its possible to make $5-$10 per hour.
Get Help With Credit Card Debt:
If you still need help with credit card debt there are always credit counselling agencies. A credit counselling agency can help evaluate options like debt consolidation or bankruptcy. The Department of Justice has an approved list of Credit Counselling Agencies for you to consider. These agencies can provide advice on how to consolidate payday loans in the best possible way. But always use caution when looking for a credit counselling agency. There are a lot of scammers out there!
Photo by Vinoth Chandar via Flickr