Eliminate Credit Card Debt

Ultimately, eliminating credit card debt is a matter of: 1) stop charging to your credit cards and 2) pay them off - the quicker the better. To accelerate the process, you will need some extra cash beyond what you are typically able to pay on your credit cards. Note that once you get this going, it becomes self-sustaining. By that I mean that each amount you pay down increases the amount you can pay down next month. Why? You will free up an ever increasing amount of cash each month due to the fact that you will pay less in interest with each passing month. This can then be added to how much credit you are able to pay off each month until the process snowballs.

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To get you jump started, consider some of the following methods to free up extra cash to eliminate that credit card debt.

Review your communications and entertainment needs

Not that long ago, the typical family paid for a phone line (maybe a couple if there was a separate line for the teenage son or daughter). Then, add in basic cable service and that was it. Now look at us…cell phones with unlimited text messaging to every family member, cable/satellite TV with premium channels, security monitoring service, and high-speed internet. All told, easily $300 or more. Needless to say, this is one area to attack aggressively.

Frequently review each credit card with the issuing bank

Check the headlines; the banks are in real trouble these days. They have taken the hapless credit card holder for a ride with penalties and aggressively jacking up interest rates at the slightest excuse. So…no need to be easy on the banks. Call them frequently and ask politely, but firmly, for a better rate. If you have some room on another card, say that you were going to transfer the balance to another card, but that first you want to allow them the opportunity to give you a better rate. In exchange, you will leave the balance on their card. If they don’t bite on this month, try again next month. Nothing ventured, nothing gained.

Shop for insurance

In the past, I was reluctant to shop around for auto insurance. After all, the insurance agent that serves me worked hard to make sure I got all the applicable discounts when I last made a change. Unfortunately for him, I finally did a bit of shopping around. Boy was I surprised to find that I was overpaying by over $100 per month. Even more shocking was the fact that I am insuring three high-mileage vehicles (read junkers). If you are driving something a little less “modest,” you stand to save even more. (Note: If you are a homeowner, be sure to get a quote for homeowner’s insurance bundled with auto insurance. It will make a significant difference in price.)

Cash is king

Next time you need a high ticket item - a refrigerator, a mattress, or even a car - spend a few months saving the necessary cash. Then get ready to bargain with the salesperson. Especially in a down economy, you can expect some great deals. Why? Because the store owner, even if he gives you a significant discount, is benefited. For one thing, he reduces slow moving inventory. Secondly, he gets more cash in hand. Thirdly, he is saving by not paying the credit card companies to process your credit card. So…cash is king. Use this axiom to your advantage.

If you have not taken all of these actions lately, do so now. I am optimistic that you will find you can save hundreds of dollars per month if you work on this aggressively. This is hundreds of dollars a month to help you eliminate credit card debt. Once you achieve that, you can begin to build real wealth. Not some phony high-stress lifestyle that keeps you running on the treadmill.

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Here are some great, easy ways to save more money on everyday needs. What to do with the savings? Pay down those credit card debts at an ever faster rate. You simply cannot eliminate credit card debt fast enough – especially in today’s dangerously chaotic economy.

Let’s start with saving on insurance. Consider term life insurance as opposed to a savings and investment life policy. Consult a qualified financial adviser prior to making a change to any existing life insurance policy. However, be aware that term life insurance can save you money.

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On auto loans, be aware that many of these loans will allow you to refinance the loan. Depending on when the loan was originated, the currently prevailing rate could be lower. If so, investigate the possibility of a refinance. Note that your new loan will not exceed the current value of the car. So, if you purchased a new car with very little downpayment, there is the possibility that the loan will not cover the full amount of the previous loan. If not, consider whether it is more valuable to cover the difference out of pocket, or forego this option.

The cost of gasoline is up and down like a yo-yo these days. However, even if it is temporarily down, pay attention to a few things to reduce you gas expenses. For example, if you get a mailer for a tune up at a local garage, take advantage of the reduced price. The money you save on gas will often pay for the tune-up and more.

Also, watch your driving habits. Some people are making it a challenge to see just how much mileage they can get from their car. Make it your challenge as well. A few easy things to consider are to keep your tire pressure at the appropriate level (low tires = poor mileage), start and stop smoothly (frequent, aggressive starts and stops burn more fuel), and organize your life to make less trips (combine all of your Saturday errands into one trip to save on mileage).

On the home front, you can start with being energy conscience. Adding insulation is expensive, but it can pay off, depending on the amount you currently have and the cost of heating and cooling your home. Get some quotes on adding insulation and ask the contractor for an analysis of how much energy you can expect to save. Then, make the calculations based on your current utilities charges.

If more insulation is out of the question, you can still make a huge difference in your utilities costs by doing some simple work to improve the seal of the exterior doors and windows. Visit your neighborhood home and garden center and discuss some of the possibilities. Think of air leaks from your home the same as money leaks. Plugging these leaks gives you more cash each month to eliminate credit card debt even faster.

Don’t forget to check your air filter for your heating and air conditioning system on the proper schedule. A clogged filter means the blower motor works harder which translated into more cost to you. If you have rooms that are infrequently used, consider closing the door to those rooms and shutting off the vents. This will save you even more.

One last area to consider is groceries. The obvious way to start saving is to use coupons. However, keep in mind that many, if not most, of the coupons you see are for premium items – or, items that are convenience oriented. Convenience can be fine as it usually frees up time – time you can then use to earn more cash in your job or other endeavors. Otherwise, these are often items you just don’t need.

If you can manage your grocery use effectively, go with bulk purchase that Sam’s, Cosco, and similar warehouse stores are famous for. Just be sure that bulk items get used and are not partially discarded due to spoilage. Otherwise, you would be better off just sticking with standard sizes.

Lastly, be aware of how sneaky groceries really are. After all, they have marketing staff to use every trick imaginable. For example, more expensive brands are typically located chest high on the shelves. Cheaper generic brands will be either lower or higher on the shelves. Also, keep in mind the all too obvious trick of putting high margin, high priced items in the middle of the isles leaving it nearly impossible to get down the isles any more. So, don’t let them fool you into those high priced, low need products.

Hopefully, this has you thinking of many other ways to save on your weekly grocery budget. Be sure to salt away those savings to retire ever more credit card debt.

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