If you have been carrying a balance on one or more of your credit cards and struggling to find the money to make the minimum payments, it may feel overwhelming. It can be easy to get discouraged and think you will be stuck in debt forever. Credit card debt can feel like a cruel cycle that forces you to spend money to survive while trying to reduce your balances.
However, with some creative problem solving, it can be easier than you think to pay off your credit cards and become debt-free. Here are seven ideas that can help you find money to pay off your credit cards.
1. Liquidate Non-Retirement Investments
If you have a retirement plan, taking money out of that could incur tax penalties or hurt your ability to retire on time. However, if you have investments in other types of accounts, such as a regular brokerage account, you should be able to liquidate those and use them to pay off credit cards without issues.
Things like stocks, bonds, mutual funds, and ETFs can be sold to pay off credit card debt. If you have outstanding debt, that debt is costing you a lot in interest payments. This situation is counterproductive because you will have some interest coming in from your investments, yet be paying interest out on debt. It is more logical to use the assets to pay off the debt and re-invest after being debt-free.
2. Get Rid of Items You No Longer Need
Websites and services like eBay, Craigslist, LetGo, and Facebook Groups all allow you to sell items you no longer need online to make extra cash. You might be surprised just how much money you can bring in by merely selling items you don’t even use. Most of us have closets and garages full of things collecting dust, which would be valuable to someone else.
3. Eliminate Subscriptions You Don’t Use
In today’s online world, many of us have subscriptions for just about everything. You might have a subscription for cloud storage, one for online backups, another for streaming music, and two or three for games. You might have also signed up for a few different memberships that you have forgotten about or never use.
Try going through your bank and credit card statements and look closely for subscriptions. If it helps, you can print them out and use a highlighter. The key is to understand how much money you are spending each month on subscriptions in total. Once you have the list, go through and evaluate which ones you don’t need. Then, cancel the subscriptions or reduce the ones you have by switching to cheaper plans. Once you’ve freed up that money each month, funnel it into paying down one of your credit cards.
4. Consider Switching Phone or Internet Providers
Your mobile phone and home internet providers are probably responsible for some of the most significant bills you pay each month. Yet many of us sign up for these plans and don’t evaluate them for years, dutifully paying the bill every month without question.
There may be newer plans available from your provider or other competing providers that could save you a lot of money. You might be able to trim services you no longer need or don’t use to save more money still.
If you have signed up for a bundle package from your internet provider that includes cable channels you don’t watch, or a landline for a phone you never use, consider switching to a dedicated internet plan to save a lot of money. If you never watch cable TV and instead rely on services like Netflix, Hulu, and Amazon, consider cutting cable once and for all and using the internet to manage your video content. Also, evaluate how often you use streaming video and consider giving up the most expensive or least watched one.
5. Get Quotes From Other Car or Home Insurance Companies
As with the phone and the internet, insurance bills are another area where we routinely pay for something each month for years on end without considering whether cheaper options have become available. You can request free quotes from competing companies who would love to have your business, and some of those quotes may be cheaper. You could save hundreds of dollars each year by merely switching insurance providers.
If you have more coverage or services on your policy than you need, you might consider adjusting it to reflect your current needs better. For instance, if you signed up for your car insurance while you were still paying off your car, you will have been required to have collision and comprehensive coverage. However, if you now own your car outright, you can switch to liability coverage or reduce the values on your other services. Taking the time to comparison shop could save you a significant amount each month.
6. Cash Out or Borrow From a Cash Value Life Insurance Policy
If you have a cash-value life insurance policy that has been sitting around for years and costing you money regularly, you could consider using it to pay your credit card bills. To do so, you could either borrow from the policy or cancel it altogether and cash it out. Both solutions would potentially provide you with an influx of cash that you could then use to pay off high-interest credit card balances, saving you a great deal of money.
7. Get Creative With Your Finances
Lastly, get creative, and don’t be afraid to make some changes to your monthly budget to better reflect your priorities. You might be surprised where you can find money if you carefully evaluate your budget and choose to spend with intention rather than on impulse.
These tips may help you find some extra cash you didn’t think you had to reduce your credit card balances. Do you have any suggestions on finding spare cash to pay off credit cards that others might find useful? Feel free to share them here in the comments below!