How Our Family Paid Off Credit Card Debt Part 2
In part one of my story, on getting out of credit card debt, I shared my personal rules for getting out of debt. This is the second part of my story. Here are additional strategies that I used or considered using. My wife and I paid off over $10,000 in credit card debt two years ago and have stayed debt free ever since.
1- Increase income. In part one I wrote about the concept of found money. Another strategy that can certainly be used to get out of debt is increasing income by getting second job or by creating a part time business. A great way to do this is, is to convert your hobby into a part time gig. Charge money for teaching piano, work as a cook if you like to cook, plow snow if you're a truck guy, or whatever. Just try to associate what you like to do with you part time work. Enjoy your time.
2- Negotiate with your creditors. Many times your creditors will be willing to lower your monthly payment, lower you interest rate or make other arrangements that will help you pay off your debt. A quick phone call to each of my credit card companies got me a lower interest rate on two of the cards. Sometimes all you have to do is ask.
3- 0% credit cards. One of the best strategies that I used was to transfer my credit card debt to a zero percent credit card. This way I wouldn't get hit with any interest charges for one year. This worked out perfectly because I was able to pay off all my cards before that deal expired. A word of caution, many times after the 0% interest period the card will start charging crazy high interest rates and there is often a variable one time fee for the initial balance transfer. If you can see light at the end of the tunnel and know you can pay off the credit card before the end of the zero percent time period this is an excellent way to keep you balance going down instead of up.
4- Non-profit credit counselor. This is another option. I did not personally do this because I knew I could manage this process myself. This seems to be a major scam opportunity, so please do your homework. Read reviews to see if the agency you are considering is legit.
One last thing, please make sure that you are paying for things in the right order. Don't try to pay down your credit cards at the risk of missing a mortgage payment. No sense in losing your home in order to pay off the Visa. First things first.
Thanks for reading. This has been part two of How My Family Paid Off Our Credit Card Debt.
1- Increase income. In part one I wrote about the concept of found money. Another strategy that can certainly be used to get out of debt is increasing income by getting second job or by creating a part time business. A great way to do this is, is to convert your hobby into a part time gig. Charge money for teaching piano, work as a cook if you like to cook, plow snow if you're a truck guy, or whatever. Just try to associate what you like to do with you part time work. Enjoy your time.
2- Negotiate with your creditors. Many times your creditors will be willing to lower your monthly payment, lower you interest rate or make other arrangements that will help you pay off your debt. A quick phone call to each of my credit card companies got me a lower interest rate on two of the cards. Sometimes all you have to do is ask.
3- 0% credit cards. One of the best strategies that I used was to transfer my credit card debt to a zero percent credit card. This way I wouldn't get hit with any interest charges for one year. This worked out perfectly because I was able to pay off all my cards before that deal expired. A word of caution, many times after the 0% interest period the card will start charging crazy high interest rates and there is often a variable one time fee for the initial balance transfer. If you can see light at the end of the tunnel and know you can pay off the credit card before the end of the zero percent time period this is an excellent way to keep you balance going down instead of up.
4- Non-profit credit counselor. This is another option. I did not personally do this because I knew I could manage this process myself. This seems to be a major scam opportunity, so please do your homework. Read reviews to see if the agency you are considering is legit.
One last thing, please make sure that you are paying for things in the right order. Don't try to pay down your credit cards at the risk of missing a mortgage payment. No sense in losing your home in order to pay off the Visa. First things first.
Thanks for reading. This has been part two of How My Family Paid Off Our Credit Card Debt.