How to Save Money with Credit Card Debt

Posted March 20, 2011 by Hasic M

Credit card debt is a burden that billions of people worldwide have to bare. Most people cannot seem to pinpoint exactly how they ended up in credit card debt, but most realize that it has something to do with how they spend their money.

Many individuals are careless and fail to pay attention to their spending. When you own a credit card, the urge to spend is prominent because the money is sitting right there. Unfortunately, credit cards draw interest, making it almost impossible to get out of debt.

Get on a Budget – Budget spending is a highly-effective way to reward yourself at the end of the week and still have money to put away for bills. Calculate how much you own in credit card debt first and then decide if you’re able to purchase extra items at the end of the week. If not, it’s best to move onto the next step.

Open a Savings Account – Your savings account can serve as a reminder and motivation to help you put away all of your leftover money. One might ask, “what leftover money”? The truth is that if you’re a big spender, there is always going to be something that you think you need. It’s best to simply forget about purchasing anymore luxury items until you’ve paid off your debt. Put all of your “chunk change” and excess money not spent on regular living costs into a savings and work toward paying off your credit card debt.

Borrow Against Your Life Insurance – If you’re much more interested in paying off your debt immediately, consider borrowing against your life insurance policy. You’ll also have the option of paying back the money you borrow. This may not be a great choice for everyone, but it’s definitely something to consider.

Borrow Against Your 401K – When you borrow against your 401K, you are opting to take money away from yourself, and then pay it back to yourself with 10% interest. By doing this, you can easily and quickly pay off your debt, minimizing the negative effects that it will have on your credit.

Get Rid of Recurring Payments – Recurring payments come in the form of magazine subscriptions, tanning bed memberships, gym memberships, and various online subscriptions. You may not be able to save a lot, but you will at least have some money to put forth toward your debt.

Use Coupons – For best results, only purchase the items listed in your coupons. Find a store that will allow you to double or triple your coupons. You can use coupons for grocery items and everyday household items such as toilet paper and cleaning supplies. Coupons can be found in your weekly newspaper as well as printed off online.

Practice Frugal Living – The practice of frugal living will require a change in thinking. From now on, become more aware of what you are purchasing. Create a list at the beginning of each week of everything that you’re going to need and purchase those items only. Always ask yourself if what you are about to purchase can wait till later. Ask yourself if purchasing the item will hurt you financially in the long run. If so, then it’s best to purchase when you’re more financially stable.

Get a Second Job – Your second job could provide money either for spending or paying bills. For even more solid results, use both the money you earn from your regular job and the money from your second job for bills so that you can get all your debt paid off even faster.

Go Prepaid – Most cell phones cost anywhere from $50.00 to $100.00 or more per month depending on your plan, the amount of plans paid for, and the overall usage. You could easily pocket at least $20.00 to $100.00 per month by opting to go prepaid. Just remember to use your phones for emergencies only.

Limit Travel – Instead of traveling, choose to take advantage of public transportation. With the current price of gas, most people are spending up to $100.00 (and several are spending much more than that) simply on commuting back and forth to work. Stay in whenever possible and skip out on joyriding – at least for the time being.

Do Everything Yourself – Most people don’t have a lot of time to sit down and study a new craft or learn a new skill. However with the convenience of the internet right at your fingertips, you can easily learn how to do just about anything, right from your home computer. If you need to repair a stove, cabinet, or get a new haircut, you can just as easily do these things yourself by taking the time out to read.

Simplify Your Life – Cutting back on personal expenses will help you to save a lot of money in the long run. Saving money and doing without your usual luxuries will require a lot of discipline on your part. Bear in mind that within only a few short months, you will have spared yourself thousands of dollars that you can now put forth toward paying off your credit card, ultimately removing the burden of debt.

Bio: Hasic M is the webmaster of Think Credit Cards, a consumer oriented site where you will learn how to consolidate credit cards, erase your debt plush much more.