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Brace yourself: Your credit card is about to get more expensive. And, you'll definitely want to do something about that.
The Federal Reserve has just raised interest rates for the first time in 2018, and has signaled that even higher rates are on the way. The interest on credit cards typically rises with the Fed's rate hikes.
In a perfect world, we'd all pay off our credit cards each month, maintain perfect credit scores and brush our teeth five times a day.
But stuff happens, and credit card companies depend on that to make a profit. If we all paid on time, every time, they wouldn't earn any money. And, credit card finance charges can add up.
With interest rates now at their highest levels in 10 years, here are ways to find extra money to chip away at your credit card debt and beat rising interest costs.
1. Look for rebates and rewards
If you patronize one grocery store regularly, join its rewards program. You'll save money through members-only deals, and you can redeem rewards on future purchases.
You can double your rewards by signing up for an app like SavingStar . It allows you to choose between cash back or gift cards for brands such as Starbucks, iTunes or AMC Theatres simply by linking your loyalty cards or submitting a picture of your receipt. SavingStar then automatically adds the value of each offer you've redeemed to your SavingStar account.
If you do a lot of online shopping, consider signing up for Paribus , which is smart rebate software that scans your email for receipts from participating retailers. If Paribus notices the price of an item you purchased has been reduced, it automatically "negotiates" with the retailer and refunds you the difference.
For more information on shopping, rebates and rewards, take a look at our article on how to save $200 (or more) every month by making simple changes to how you grocery shop.
2. Put your extra space to work for you!
A bit of spare time and a spare room. That’s all you need to get started earning extra income as a host on Airbnb.
Whether you want to become an entrepreneur and work for yourself or if you already have a full-time job and just hope to make some extra cash in your free time, Airbnb can be the answer. You get to choose when and how often you host. You can share a spare room in your apartment, or host your whole home the next time you’re out of town.
Airbnb makes it simple to earn extra money by putting your extra space to work for you.
3. Negotiate everything
We tend to view things like utility bills, car payments and past-due bills as fixed amounts with no room for discussion. But everything is negotiable, and you'd be surprised how much money you can save by negotiating with your creditors and service providers.
Reach out to your mobile phone service provider and let them know you're considering switching to another, less expensive carrier. To avoid losing your business, they may inform you about discounts or packages that could cut your monthly bill.
The same holds true for car insurance, gas and electric, internet providers, and so on. Explore your options, negotiate and save.
While you're at it, ask if your credit card issuer will lower your rate. If the answer is no, shop around for a 0% credit card.
4. Sell your stuff
Most of us have things we don't need just lying around. Selling that stuff can free up space in your home or garage, and give you extra money to use to pay down your credit card debt. Take an inventory of every extraneous thing you own, and see what might be of value to someone else.
We recommend you download an app that will connect you with buyers for your stuff. One app that stands out is Decluttr , a free app that directly buys your gently used books, CDs, DVDs, games and gadgets. In our opinion, Decluttr beats other apps because it gives you an estimate of how much your items are worth, sends you free postage to mail your items, and pays you the next business day after the buyer receives your things.
To get started, download Decluttr . Once you're set up, scan the barcodes or input the model numbers of the items you're selling.
Go on, and turn your books and DVDs into cash! It's all going digital anyway!
5. Consolidate your debt
Paying a bunch of different bills can be confusing and time-consuming — which is why they often go unpaid and accrue interest.
If you have multiple unsecured debts, and particularly if some have punishingly high interest rates, consider a consolidation plan. You'll be writing one check instead of several, and having one debt consolidation loan with a lower interest rate will save you money in the long run.
You might consider Even Financial , a personal loan matcher that can get you approved for a $1,000 to a $100,000 loan to pay off your debt. The repayment terms are between two and seven years, depending on the loan. Checking to see if you qualify will not affect your credit score.
Another option is an app like YNAB (You Need a Budget) to help you collect and organize your debts in one place and budget your way out of the hole. YNAB monitors your money so you can adjust your spending to pay your bills, nix that debt and improve your credit score, all at once.
6. Automate your payments (and savings)
If the last suggestion appealed to you because you have trouble remembering to pay bills, but you'd rather not apply for a debt consolidation loan, automation may be the way to go.
Most credit card companies allow you to set up an automated payment plan. You choose an amount you know you'll be able to cover and have it deducted from your account automatically each month.
With an emergency fund you won't have to resort to using a credit card for unexpected expenses. Have an amount deducted from your paycheck each week or from your checking account each month, and watch your savings grow. Just resist the temptation to take the money out before you really need it!
7. Watch your credit closely
Services such as Credit Karma and myFICO can help you keep an eye on your credit score.
myFICO can help you uncover issues that are negatively affecting your score, so you can contact the appropriate credit reporting agency and have mistakes amended or removed from your credit report.
A good credit score can help you negotiate a lower interest rate if you choose to refinance or consolidate your debt. See if you qualify for a 0% credit card, to consolidate your balances interest-free for a time.
8. Get a side gig
Consolidation, negotiation, and automation can only go so far. At some point, you need to earn more money. We've already talked about renting space in your home -- so how about getting some additional use from your car?
Uber and Lyft allow you to set your own schedule and earn money in your free time by getting others where they need to go. Each has its own advantages, and you can work for both if you're up for it.
Another idea if you have a car and want to earn money without driving people around is to sign up with Door Dash and get paid to deliver food.
And if you don't have a car or you'd prefer to work from home in your pajamas, read our article on the topic. If you want to get out of the house, earn some money, and interact with other people, we also have an article for that!