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You know the old saying, “Fight fire with fire”?
It kind of has a nice ring to it, right? Here’s a nice twist on it: Use credit card issuers’ setups to claw back a bunch of money they charge you. Isn’t that poetic justice?
But is it realistic? Can you really use credit cards to get out of debt faster? Yes, you can. Keep reading and I’ll show you how.
A Typical Example
The average American household with credit card debt owes $7,149 and pays an average of $1,155 a year in credit card interest. And many families are in a far deeper credit card hole.
We’ll take as an example the Smith family. The Smiths carry three credit cards and have a total credit card debt of $10,000. Their card debt is distributed as follows:
- The lowest-interest card charges 18% interest and has a $3,000 balance.
- The second-lowest-interest card charges 21% and has a $2,000 balance.
- The highest-interest card charges 24% (yes, some charge that or even more) and has a $5,000 balance.
Each of these cards requires a minimum payment equal to the higher of $25 or 1% of the new balance plus interest plus fees. If the total balance is under $25, the minimum is equal to the total balance. While many people will hire a financial advisor or work with a financial coach to develop a personalized debt payoff plan based on their individual circumstances, the Smiths just decided they’re going to do whatever it takes to get out of credit card debt.
Let’s see their options and how each one pans out.
Plan 1: Minimum Payments Only, But Stop Digging
The Smiths know they shouldn’t charge anything new on their cards, but their finances aren’t in great shape, so they still need to charge about $500 a month for various expenses.
There’s this serious joke they heard: “What’s the first thing you do if you find that you’ve dug yourself into a hole? Stop digging!”
So they vow to pay off at least the minimum payment on each card. They’ll charge the $500 in new charges on their lowest-interest card, then each month they’ll pay off that extra $500 on top of the minimum payment, plus the extra interest the card issuer charges on that $500.
Their minimum payments start out at $579 for the first card (including the $500 in new charges), $55 to the second card and $150 to the third. It takes a while, but they finally manage to pay off the middle card. As soon as that happens, they start charging the $500 in new charges each month on that card to avoid paying any interest on it.
The good news is that over time, as they pay down their debt, their monthly minimum payments go down, so they’re less stressed. The bad news is that paying just the minimum means the Smiths end up paying a total of $25,397 to pay off their $10,000 in credit card debt. It takes them 234 months, or 19.5 years, and they pay nearly $15,400 in interest, which is more than their entire original debt.
Plan 2: A Far Better Option – the Snowball Method
Dave Ramsey’s favorite way of guiding people out of credit card debt is the so-called “debt snowball method.” Here, you pay the minimum on each card that has a balance and as much extra as you can toward the card with the lowest balance.
For the Smiths, that’s the one with $2,000 balance.
Again, they charge the new $500 on the lowest-interest card and pay enough above the minimum payment that this new $500 plus the interest on it are paid off each month. Again, as soon as they pay off the middle card, they switch the $500 monthly purchases there and pay no interest on that $500.
Their minimum payments are the same $579, $55 and $150 in the first month. However, the Smiths decide to bite the bullet and keep paying the same total amount, even as their balances slowly drop and the minimum payments with them.
They send the extra dollars toward the card with the $2000 initial balance. Once they pay off that one, they shift all the dollars freed up toward the next-lowest-balance card. Once they pay off that one, too, the full monthly amount they’ve been paying goes toward the final card.
There is very good news here. Instead of 19.5 years, they manage to become debt-free in less than five years. They save nearly 15 years of being in the hole and almost $9,200 in interest!
Plan 3: Another Great Option – the Avalanche Method
There’s a method that’s better than the snowball method, but it requires more discipline.
Here, the Smiths do everything the same, except that they send their extra dollars toward the card with the highest interest. Once they pay off that one, they shift all the extra dollars toward the card with the next-highest interest. Only once they pay off the other two cards do they send all their dollars toward the last, lowest-interest card.
Their initial payments are the same as above and remain the same until their last month in the hole. This method saves the Smiths an extra $86 relative to the snowball method. It may not be all that much, but when you’re in debt, every dollar counts!
Plan 4: Using the Credit Card Perks Against the Issuers
It turns out that the highest-interest card pays the Smiths a 2% reward each month on any new purchases. Unfortunately, the reward doesn’t apply to the old balance.
Since the reward is 2% of the $500 monthly purchases, or $10 a month, and the interest is only half that, the Smiths use their reward card to make the $500 in new purchases each month. They then add the $10 reward to the payments they send to whichever card is the current target of the avalanche.
This tiny boost is enough to carve out an extra month from their time until they’re debt-free and saves them an extra $149. The Smiths love that they’re able to use their card’s perks to reduce how much they have to pay the issuers.
Plan 5: Using a Teaser-Rate to Carve Out a Bigger Bite Out of Your Debt
Here, the Smiths find a new and intriguing credit card offer.
This card also charges 24% (ouch!), but waives it completely for the first year – 0% for 12 months! Even better, it offers the Smiths a free balance transfer from one other card and a $200 bonus after three months. The Smiths are ecstatic!
They decide to use the Avalanche method but will target the new card first because they want to pay it down as much as possible before month 13 comes around along with the 24% interest rate. They also decide to send the $200 bonus back to the issuer as soon as they get it to pay the balance down even faster! This method cuts their time in debt by another nine months and reduces their total interest payments by an extra $2,700! Now that’s not chump change!
In total, compared to making just the minimum payments, this method gets the Smiths out of debt in under four years, saving them over 15.5 years and over $12,000 in interest! Instead of paying half again as much as their original debt just in interest payments, they pay just about 1/5 of the interest!
How’s that for using credit card issuers’ tricks against them?
The Bottom Line
If you’re deep in credit card debt, it isn’t easy to get out.
However, if you stop digging (i.e., don’t use the cards for any purchase you can’t pay at the end of the month), and use the snowball or avalanche method, you can save yourself a ton of money and years of debt servitude.
If you have a card that pays rewards, you can also use those to accelerate your credit card payments. And if you can get a new card with a 0% teaser rate and a cash bonus, you can use those to cut more months of being in the hole and lots more dollars of total interest paid.
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50 ways to make an extra $100 a day
Busy but kind of broke? Join the club.
The internet is full of lists about ways to make $100 a day in passive income, but if you’re not prepared to sell an organ or become a Wall Street wolf overnight, a lot of those lists won’t do you much good.
For those looking to make money online, on the bus to work, or even laid out on your couch, there is a slew of options at your disposal. And they don’t even involve you spamming your former high school classmates’ inbox desperately trying to sell overpriced hair products or yoga pants for dubious online companies.
From becoming a virtual assistant to teaching online and selling physical products to creating sponsored social shares, there are plenty of opportunities to make passive income every month.
Here’s a roundup of easy ways to earn a hundred dollars a day in your spare time without losing your dignity or kidneys.
Jcomp / istockphoto
DepositPhotos.com
Survey sites like Swagbucks will help you get paid if you already spend a lot of time online. Many Swagbucks users make $1 to $2 a day by taking surveys, shopping online, and watching videos. The app offers a myriad of ways to earn cash back through gift cards or PayPal.
Swagbucks
InboxDollars is another app that’ll pay you to play games, take surveys, watch videos, or do various other tasks. Next time you’re scrolling mindlessly through social media or watching a show, go to InboxDollars so you can get cash back on the side.
IndboxDollars
Survey Junkie connects you with brands and companies looking to get your opinions on a variety of subjects. This app will pay you to take surveys or even join focus groups depending on your demographics and interests.
Survey Junkie
Survey Rewardz also partners with companies to survey users and provide them with valuable marketing information. These companies pass along a small cash back reward to those willing to answer survey questions.
Survey Rewardz
This group has been pairing companies with users for over 20 years. With millions of survey takers to date, the site will pay for your feedback. Its partner companies will then use the survey results to inform its marketing decisions. You could easily make a hundred dollars a day simply by giving your opinion in your spare time!
American Consumer Opinion
Alliant Credit Union
Next time you go to the store, be sure you don’t skip on the receipt. Earn passive income by downloading the app, scanning your receipts, and saving up cashback and other perks from your favorite stores. You can use these rewards in-store and online.
Ibotta
You can get cash back rewards from many credit cards, debit cards, and loyalty programs. Check with your card holders to see what offers are available. You can also check your app store to find out if the stores you visit online or in-person the most offer royalty rewards.
DepositPhotos.com
If you need help finding cashback and reward offers, Rakuten is the place for you. Use their mobile app or website to help you earn cashback and other rewards for the sites you already shop on. Getting paid is easy. Just connect Rakuten with your PayPal account to cash in your rewards. This is an easy way to earn extra income every day.
Rakuten
Pay your bills online with Trim to make sure you’re taking advantage of savings without doing the work. Trim automates the savings process by negotiating bills, fees and even canceling old subscriptions. You don’t do any of the work; just sign up for a subscription and let experts do the work for you.
Asktrim.com
BillShark is another great way to negotiate bills and fees. Just download the app, upload your TV, cable, internet, phone, or other bills and let experts negotiate lower fees on your behalf. The best part? If BIllShark can’t lower your bills, they don’t get paid. You’ll easily make $100 extra bucks or more with how much you save on bills.
BillShark
Before making your next online purchase, be sure to download the Honey app or browser extension. Honey scours the internet for coupon codes to save you money on your purchases. Even if they don’t find a discount code for you to use, you can earn Honey points to make extra cash via gift cards from Amazon, Target, Walmart, and other retailers.
Courtesy image
DepositPhotos.com
While you may not make money off YouTube immediately, you can build up your subscribers and view counts so you can start putting advertisements on your videos. You can also get tips from users if you do live streams.
DepositPhotos.com
Can you match $100 a day by playing video games online? Many streamers make more than that in tips from viewers in just a few hours of streaming on Twitch. Not a gamer? Stream musical performance, how-to videos, workout classes, and more. You can get paid to do the things you love or even teach others to play an instrument or learn a language. Audience members who like your live streams can donate tips to you, which you can cash out at any time.
DepositPhotos.com
If live-streaming isn’t for you, you can become a Twitch moderator. While not all moderators are paid, many streamers are at least willing to share their Twitch tips with moderators who keep the inappropriate language out of their chats or answer audience members’ questions.
Related: Do you have what it takes to be a Twitch moderator?
Markiplier/ Twitch
Many successful live streamers or YouTubers don’t have time to edit videos themselves. If you know how to edit videos, you can help content creators get their videos out sooner while also making extra income.
BartekSzewczyk / istockphoto
Good at photoshopping? Make passive income by creating the cover image for Youtube or videos on demand (VODs). These thumbnails are simple yet catchy images that show viewers what their video is about. Many content creators are willing to pay for anyone willing to help them make an eye-grabbing thumbnail.
NikkieTutorials / YouTube
Content creators may offer exclusive emoticons or emotes to viewers who pay to be subscribers or members of the YouTube or Twitch channels. If you know how to make basic emotes, you can make quick money by working with content creators to make one-of-a-kind emoticons that fans can use in live chats.
DepositPhotos.com
If you’re good with a camera, you can upload your photos to various stock photo websites, such as iStock or Deposit Photos. While each site will have different rules regarding how you get paid, you can get credit for your photos. You’ll easily add $100 or more to your passive income revenue by selling stock photos.
Deposit Photos
More and more small businesses are relying on their own sites for eCommerce and spreading brand awareness. However, many owners need help designing their site. If you know basic coding and are familiar with popular hosting sites, such as Weebly or Squarespace, you can take on clients on a freelance basis to make some side cash.
Depositphotos
Tevarak/ istockphoto
This option will let you clear out your home and fill up your bank accountant. While designer and well-known brands will fetch you more money online, Thredup and Poshmark also accept non-designer items. The cashout for non-designer items may be lower, but the savings can add up over time.
H E N G S T R E A M on Unsplash
Do you have digital artwork or prints you’re looking to sell?
Jump on the nonfungible tokens (NFTs) bandwagon and convert your artwork into profit. Many artists are making $100 a day or more by selling their art as NFTs. There are plenty of ways you can hop online to learn how to use NFTs if you’re not already familiar with how they work.
Sergey Shulgin / iStock
Not ready to make an NFT?
Sell your physical crafts or other goods through popular craft sites like Etsy. Since the pandemic, the demand for local or small business-made artwork and jewelry has increased. You can capitalize and make quick money on your talent by creating an online marketplace.
etsy
If you have gently used technology, furniture, or other goods, hop on eBay or Amazon so you can sell to buyers looking for a bargain. If you own your own business, you can even create an official store through these popular sites so you can reach an even broader audience.
DepositPhotos.com
For less valuable goods, use Craiglist, Facebook Marketplace, Letgo, or other sites that match local buyers with sellers. You can move clothes, yoga mats, planters, and more quickly and even arrange socially distanced pickups.
Depositphotos
Vladimir Vladimirov
Turn your love for yoga, pilates, workouts, dancing, or more into a fun way to share your passion with others and get paid. Many people are willing to sign up for digital workout classes for a flat price or a suggested tip. You can simply share a Zoom link for a fee or use Twitch, YouTube, or even live stream through Facebook.
depositphotos.com
For those who have beefed up their home gyms during the pandemic, a personal trainer can be a great way to turn their pandemic panic buy into a way to actually go through with their plans to reach fitness goals while stuck at home. Make quick money online by walking through workout routines, warmups, and how to use gym equipment so others can safely learn to work out from home.
DepositPhotos.com
Have extra fitness equipment? Rent out your dumbbells and equipment to others who are trying to get into shape. You can help and make good money by renting out equipment when you’re not using it.
depositphotos.com
Help others sort out sustainable diets from trendy ones. Many people need assistance planning out meals, determining if going keto is right for them and answering other nutrition-related questions. You can also offer meditation and motivational classes too. You could easily make a hundred dollars a day with this side gig!
DepositPhotos.com
Love cooking? Help others find their passion for food by teaching them how to find deals, plan healthy meals and snacks, and find recipes that work for their dietary and nutritional needs and goals.
Tijuana87
If you love cooking, you can always take meal planning a step further and prep the meals yourselves. Many people are looking for local alternatives to national meal prep companies. Make extra money by sharing your favorite meals with others. You can offer different plans depending on your future clients’ nutritional needs and how many meals they’re looking to buy. Just be sure to follow good kitchen hygiene.
DepositPhotos.com
Maria Symchych-Navrotska / istockphoto
Many professions require listening to recordings and transcribing them in full. If you’re willing to transcribe these recordings, you can get paid handsomely for your efforts. Use sites like Fiverr or dedicated transcription agencies to sign up and take on clients on a freelance basis to make more money every month.
fizkes / istockphoto
With the rise of online learning during the pandemic, many students from K-12 to college need extra help as in-person tutors become scarcer. Teaching English online is especially in demand. You can sign up to work with an agency that offers tutoring services or advertise to friends and family yourself to build up a client base. The hourly rates will vary depending on which service you sign up with.
Yelena Khayrullina / istockphoto
News organizations, offices, and many other professions all need help filling writing and editing roles. If you have a knack for grammar, you can freelance from anywhere in the world. Make good money from freelance gigs on LinkedIn, Indeed, Fiverr, and even social media posts from independent workers or small businesses asking their followers for help filling these roles. If you love writing, you could also start your own blog and use affiliate links to start making money on your own time, too!
negativespace.co
If you have an upbeat personality and enjoy talking to people, many companies are looking for customer service reps who can work from home. There are plenty of options, from large corporations to local businesses, if you’re willing to work odd hours and help people solve their problems or answer questions about a business or product. If you’re willing to work a few extra hours a week as a customer service rep, you can easily make an extra $100 a day without ever leaving your couch. The average hourly rate may vary, but you can make good money with this job no matter your schedule.
DepositPhotos.com
Do you have experience in leadership, marketing, getting the most out of tax refunds, or a variety of other in-demand topics? Then the chances are high that there’s a market for your advice or expertise. Many entrepreneurs are selling their expertise through webinars that are either live or prerecorded. You can make money quickly by hosting them through Zoom, Facebook, your personal website, or various other sites and either ask for a flat fee or tip for access to your webinar.
Ridofranz/istockphoto
As more people adjust to working from home, the demand for virtual assistants has increased. If you’re good at managing schedules, ticking off to-do lists, and helping people get through their day, you could sell your services as a virtual assistant.
fizkes / istockphoto
Many people are willing to pay you for feedback on their website or physical product from tech startups or professionals revamping their portfolios. Whether you have an eye for good website design or comparing products, you can get paid through sites like UserTesting.com for your feedback.
AAUB / istockphoto
If you already spend most of your time on social media, you can capitalize on your free time by getting paid as a social media manager. This could involve creating posts, targeting certain audiences, affiliate marketing, building up followers, posting photos, or creating several other posts that will engage a business’s targeted audience and increase its brand recognition.
DepositPhotos.com
DepositPhotos.com
Going out of town and not taking your car? Rent it on a site like Turo to make quick money and easily earn $100 a day. The company will connect you with nearby candidates who want to rent a car. You can set the price per an allotted period of time and even a fee to cover insurance costs.
DepositPhotos.com
Anyone who owns or rents a coveted parking spot can rent them out for a fee through SpotHero. This can be an especially lucrative way to make money every month if you have a parking spot in a cramped city or another area with few parking spaces to go around.
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Spacer is another great alternative for anyone with a parking space or spare garage to rent out. It’ll be especially easy to make a hundred dollars or more if you’re looking to rent for a month or longer since Spacer connects users wanting to rent monthly with those looking to rent through the site.
DepositPhotos.com
Cameras, film equipment, audio equipment, and more are in high demand but can be expensive to purchase. If you have any equipment you’re willing to rent out for some passive income; you can make money off sites like ShareGrid and KitSplit.
DepositPhotos.com
When you’re not traveling the country in your RV, rent it out on RVShare to make extra cash. Since the pandemic, demand for RVs has skyrocketed, making it the perfect time to put your camper on the market and earn some passive income off it.
Pekic
Selling physical products, like clothes, online can take more time, but it’s still an easy way to earn passive income and make an extra $100 fast. Clothes for special occasions can rack up and take up space in your closet. You can rent expensive tuxedos, dresses, and other items online through StyleLend, RentMyWardrobe, and other sites.
DepositPhotos.com
Going out of town? Rent out your space on Airbnb. Depending on where you live, your home, apartment, or condo could get high dollar amounts, especially if it’s around the holidays or peak vacation times.
DepositPhotos.com
pixelfit
If you play games on your phone anyways, download Mistplay.
The app helps you earn points that you can cash in for gift cards to your favorite places. You can even add your friends on Mistplay and compete in challenges with them while earning extra money every month.
Depositphotos
Swap out your regular solitaire app for Solitaire Cube so you can start making money in your spare time. If you’re a casual solitaire fan, you can play in the Practice League and work your way up in the leaderboards. Anyone who places in the top three of the boards will win prizes through Solitaire Cube.
Depositphotos
Looking to discover new games? Connect with Bananatic to download free games. You can play or test out new games, gain banana coins and cash them in for various prizes, including game skins, steam wallets, pay safe cards, and more. This is a great way to earn extra money every month.
pixdeluxe
Play bingo in Blackout Blingo, formerly Blackout Blitz, to earn rewards and cash. The bingo game has already garnered the attention of over 5 million players. You can play on your android, iPhone, or iPad anywhere and at any time.
DepositPhotos.com
Nielsen is a global marketing agency that offers various ways you can get paid for your opinions, testing products, and even playing games. Join their Nielsen Panels, Nielsen Families, or other research groups to earn cash for your opinions on games, movies, TV shows, products, and more.
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produced and syndicated by MediaFeed.org.
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Featured Image Credit: Anchiy.
