The question of using your 401K to pay off your credit card debt is related to many topics we have discussed before including: keeping your house out of foreclosure to paying your credit cards on time. I have suggested actions such as renting rooms out or getting a second job. Having debt can be very stressful, but if you want to get out from under your mountain of debt, you may have to do things you don't want to do. You need to consider what is more stressful? Making those payments forever or biting the bullet and cut back for a while. Here are some additional ideas for finding extra money to pay towards your credit card debt. They may make small dents in your credit card debt, but they will really add up over time.
- Sell any investments you have
- Sell other assets, a boat, comic book collection, extra car, jewelry, etc. Anything that you can trade for cash.
- If you have child support payments see if you can get your obligations reduced.
- Use your tax refund or alimony payment.
- Transfer your credit card balances to a card with a low interest rate.
- If you have a card with an annual fee see if the credit card company will be willing to waive it.
- Borrower money from family or friends. But remember you need to pay them back too. You can really ruin your relationship with them over something like this.
- Get rid of your overdraft protection on your bank accounts. This will help you from getting into more debt.
- Shred any cash advance checks you have received from your credit card company. If you haven't paid the balance off when the interest adjusts, it will make things worse.
- Don't use ATM's at banks other than your own. ATM fees can really add up.
- Put away your credit cards so you are not tempted to charge on them.
- Increase the number of dependents you claim on your W-2 at work. But be careful. You can end up owing money come tax time if you listed too many dependents.
- Start a budget and watch where your money is going. You may find other ways to cut back.
- See if you qualify for assistance from a local food pantry or other charities.
- Apply for public assistance if you are out of work or disabled. This money will not be enough to pay off your debt, but it may give extra money to put food on the table.
- Some rewards cards offer cash back incentives. See if you have any cash due and put towards your credit card debt rather than spend it.
- Stop taking cash advances on your credit cards. The interest and fees will make things worse.
It's not that hard to be creative. Put your mind to it. There is always a way to cut back somewhere.
Have you paid your debt off by finding ways to cut back? Let us hear from you. Share your tips and let's give some folks some ideas.
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