| Running up credit card debt, it's so easy to do, | | | | the savings outweighs the cost of moving. |
| especially since we are all trying to achieve the | | | | Perhaps it's a matter of dropping some cable |
| American Dream-- a new chair for the living | | | | channels or living without Internet access at home. |
| room, braces for the kids, a new outfit for | | | | Cutting your food bill is one of the most effective |
| Saturday night dates, eating out with friends, and | | | | ways to find extra money. Try not eating out as |
| driving our new SUV that guzzles the gas and | | | | often, keep a price book, shop alone, eat a snack |
| increases the insurance bill. It all seems to have | | | | before grocery shopping, buy in season fruits and |
| become a part of normal daily living. We pay the | | | | vegetables, eat less meat, and avoid cold cereal |
| minimum due, watch the balance go up, and put | | | | (hot cereal is cheaper and healthier). |
| on a happy face because we've got it all. | | | | Making minor lifestyle changes can help you |
| Gerri Detweiler, author of Slash Your Debt, Save | | | | achieve the new American dream--freedom from |
| Money & Secure Your Future and founder of | | | | debt for all! |
| DebtConsolidationRx.com, notes, | | | | Get Another Job |
| "Americans are pretty optimistic so it often takes | | | | That's right! It might temporarily take a part-time |
| a long time for a consumer to realize credit card | | | | job delivering pizzas to get you and your family |
| debt is a problem. Most of us are counting on | | | | back on the right path. Or if you are living off one |
| something to help us get rid of the debt quickly. It | | | | income so mom (or dad) can stay home and |
| could be a raise, business income, even an | | | | raise the kids, consider opening a home daycare |
| inheritance or lottery ticket." | | | | or other home based business. That way you still |
| That's what Chip and Shelley Smith of Midland, TX | | | | get to be with your own children and earn some |
| thought when they first got married. Happiness | | | | extra money at the same time. |
| must at least partly come from keeping up with | | | | Sell Some Stuff |
| the Jones's. But years later and upwards of | | | | Chances are you have lots of sellable stuff you |
| $50,000 in credit card debt Shelley says they had | | | | aren't using packed in the back of your closet or |
| nothing to show for it. They aren't world travelers | | | | in boxes in your garage. And if you aren't the |
| and they weren't having any fun. It was the daily | | | | sentimental type go ahead and sell grandma's |
| trips to Target and Pier One Imports for items | | | | china. Even if you are sentimental, consider |
| they didn't need but thought they might use one | | | | keeping only your most treasured heirlooms. Try |
| day that got them into trouble. | | | | not to overlook something that doesn't appear |
| They finally woke up after attending a Dave | | | | valuable. The Smiths inherited a painting that hung |
| Ramsey seminar and realizing the craziness of | | | | in her grandmother's garage for years and it |
| paying interest for pizza. After making changes in | | | | ended up being auctioned off for $40,000 at |
| their lifestyle, selling lots of items on Ebay including | | | | Christie's in Boston! |
| family heirlooms, and working their way out of | | | | Tap Into Your Assets |
| debt, Shelley now sleeps well at night free from | | | | If you do have some savings, consider pulling |
| wondering how to pay their bills. | | | | some of it out to pay off your debt. You typically |
| You can sleep well too! Detweiler says if you | | | | don't earn near enough interest in a savings |
| have credit card balances running up with no idea | | | | account (typically around 1-2%) to outweigh the |
| how to make them start running down, if you | | | | interest you're paying on credit card debt |
| have no idea how long it would take and how | | | | (typically around 15%). You can consider tapping |
| much it would cost to pay your balances off, or if | | | | into a 401K plan too, but be cautious with this |
| you're paying off a credit card with another credit | | | | option. You will need retirement savings some day |
| card it's time to get serious about your debt. | | | | and according to Detweiler, these types of |
| Create a Repayment Plan | | | | accounts are usually protected during bankruptcy |
| This is the first important step in your journey | | | | proceedings. It may be a good idea to speak with |
| because it lays out the path ahead. A repayment | | | | a lawyer about bankruptcy options before using |
| plan will clearly show you all your debts, how long | | | | retirement money. |
| it will take you to pay it off, and how much it will | | | | Moving Forward |
| cost in interest and fees to pay it all back. It will | | | | Once you've found some extra money to start |
| also give you a good idea of what options you | | | | paying more than the minimum you're ready to |
| have. For example, Detweiler says if your plan | | | | move forward. Determine a fixed monthly |
| shows it's going to take more than 3-5 years to | | | | payment you can put towards the debt. Pay only |
| pay off your debt on your current budget, then | | | | the minimum on all your credit cards except the |
| it's important to seriously consider debt counseling. | | | | one with the highest interest rate toward which |
| Bankruptcy is also an option, but most consumer | | | | you will pay as much as your budget allows. |
| advocates stress that is should always be an | | | | Detweiler adds, |
| absolute last resort. | | | | "For most people paying the highest interest rate |
| For help on creating your plan, visit The site | | | | credit card is best. Once it's paid off, then move |
| offers everything from a personalized repayment | | | | on to the next highest interest rate keeping your |
| plan to monthly credit reports, and ways to lower | | | | same fixed monthly payment." |
| your finance and insurance costs, build better | | | | Another option that worked well for the Smiths is |
| credit, monitor and protect your assets, and | | | | paying the lowest balance credit card first. Smith |
| optimize your bill payments. | | | | said that quickly getting rid of the first credit card |
| Finding Money for Your Payments | | | | debt gave her the confidence and motivation to |
| It's time consuming and costly to try getting out | | | | move onto the next. |
| of credit card debt by paying only the minimum, | | | | Contact Credit Card Issuers |
| especially if you continue to charge purchases. But | | | | It's always a good idea to contact your credit |
| at times it can feel almost impossible to find the | | | | card issuer to try and negotiate a lower interest |
| extra money to be able to pay more. Here are | | | | rate. If they won't give you a lower rate, try |
| some tips to help you get started. | | | | applying for a new low-rate credit card. The "Card |
| The "B Word" | | | | Reports" section of is a great place to shop and |
| While it's not most people's favorite thing to do, | | | | compare credit card offers. If you do get a new |
| taking one month to track every single penny | | | | low-rate card then immediately transfer as much |
| you spend through a budget is an invaluable step | | | | of the balance from your higher rate card(s) as |
| in getting out of credit card debt. You're sure to | | | | possible. If possible, try not to exceed 50% of |
| find areas where you can cut back. The biggest | | | | the credit limit of any of your cards as doing so |
| areas of overspending are food and | | | | could lower your credit score. By staying under |
| transportation. Detweiler says she's seen | | | | the 50% mark you may find new low-rate credit |
| consumers discover they were paying $200 a | | | | card offers appear in your mail box, which could |
| month for pizza delivery or $160 a month at the | | | | give you a valuable tool in negotiating. |
| office vending machine. Don't be discouraged, | | | | If you are behind in your payments, some credit |
| however, if you only find $10 as any little bit can | | | | card issuers may even be willing to set you up on |
| help reduce your debt. | | | | a hardship plan where your required payment is |
| After tracking spending for a month you may find | | | | reduced. Credit counseling agencies may even be |
| it necessary to make a few lifestyle changes. It | | | | a better alternative. Detweiler notes, |
| may not be easy, but the changes aren't | | | | A hardship program done directly with the credit |
| necessarily permanent either. Here are some | | | | card issuer won't have this advantage, so as long |
| ideas to get you started living a more moderate | | | | as you are paying less than the contractually |
| lifestyle. | | | | agreed upon amount your account will have a |
| If you have good local public transportation or | | | | negative standing. |
| good bike routes, consider living with only one car. | | | | Final Thoughts |
| If you do need two cars consider a trade down, | | | | Getting out of credit card debt is never an easy |
| which could also lower your gas and insurance bills. | | | | process, but it can be done. The extra effort |
| Reduce your housing costs by setting the | | | | definitely pays off, not only financially but also |
| thermostat a little higher in the summer and a | | | | when it comes to your peace of mind. We |
| little lower in the winter. Or do you even have an | | | | sincerely hope that these self-help techniques will |
| extra room you could rent out? Maybe moving to | | | | help you achieve the new American dream-- |
| a smaller place would save you money, assuming | | | | freedom from debt for all! |