I Need to Get Rid of $5,000 in Credit Card Debt. What Should I Do?
If I owe my co-worker $5 for pizza, I feel little angst as I Venmo the payment.
But when I owe, say, my credit card company $5,000, I’m prone to panic (and stress-eating more pizza).
But when you break it down into more digestible amounts, $5,000 is a doable amount over time, so long as you create a plan of attack.
That doesn’t necessarily mean you have to start selling everything you own to make a payment (or stop eating — heaven forbid). Sometime it just takes a little digging to find extra cash where you’re already spending.
How to Pay off $5K in Credit Card Debt
Creating a plan of attack for paying off debt can feel overwhelming at first, but it doesn’t have to be, especially if you break down payment schedules to fit your budget.
Rather than going it alone, check out these resources for ways to help pay down your credit card debt. So you can get back to more important things. Like pizza.
1. Ask This Website to Pay Your Credit Card Bill This Month
No, like… the whole bill. All of it. All that debt racked up from the 300 destination weddings your friends made you attend (thanks!) could be paid by the end of this month.
Your credit card company is ripping you off with insane rates, and it’s getting rich off of you. But there are other, nicer companies that’ll help you out. A website called Fiona knows the best ones and could pair you up as soon as tomorrow.
Here’s how it works: Fiona will match you with a loan that’ll cover your credit card tab. Use that loan to pay off your debt, then make monthly payments to repay the loan. It could lower your monthly payments and help you pay off that debt a lot faster. Plus, no credit card payment this month.
Fiona won’t make you stand in line or call a bank. And if you’re worried you won’t qualify, it’s free to check online. It takes just two minutes, and it could save you thousands of dollars. Totally worth it.
Now you can finally stop holding a grudge against that friend who thought a Mexico wedding was a good idea.
2. Stop Giving Your Car Insurance Company Extra Money
You’re probably overpaying for car insurance. And how would you know, really?
Have you shopped around lately? Have you compared rates from the 20 largest auto insurers that do business in your area? That sounds kind of difficult and time-consuming, doesn’t it?
Fortunately, a service called Gabi will do it for you, and you don’t even have to fill out any forms. Simply link your insurance account and provide your driver’s license number, and Gabi will go to work.
Once you link your insurance account to Gabi, it will:
- Scan your existing insurance plan.
- Analyze what coverage you have.
- Compare the major insurers’ rates for that same coverage.
- Help you switch on the spot if it finds you a better rate.
Gabi says it finds an average savings of $720 per year for its customers.
It is a true apples-to-apples comparison at the same coverage levels and deductibles you currently have. Once you sign up, you never have to shop again. Gabi’s software has your policy on file and keeps on monitoring for savings as your life changes.
3. Find Some Hidden Cash
Remember when getting the mail was fun? Now it’s just bills. And Valpak envelopes.
But for Colleen Rice, checking the mail meant finding checks. For doing nothing. Seriously. Since she started using a free website called Rakuten, she’s received $526.44.
Rakuten has the hookup with just about every online store you shop, which means it can give you a kickback every time you buy toilet paper on Amazon — even book that flight home for Thanksgiving.
Rice says she uses Rakuten for things she already has to buy, like rental cars and flights. She even used the money she earned to help her pay for her recent cross-country move.
It takes less than 60 seconds to create a Rakuten account and start shopping. All you need is an email address, then you can immediately start shopping your go-to stores through the site.
Plus, if you use Rakuten to earn money back within the first 90 days of signing up, it’ll give you an extra $10 on the first check it sends you.
Talk about money for nothing.
4. Never Miss a Credit Card Bill Again (Without Using Auto-Pay)
Keeping track of your monthly bills can be tricky, even for the most organized types. Throw a credit card in there, and a missed due date could mean late fees and interest.
Sure, there’s auto-pay, but if you don’t budget properly? Hello, overdraft fees.
A tool called Charlie has your back. Sign up for free through Facebook Messenger (yup, no need to download another app), and set up bill-pay reminders. Then, Charlie will nudge you when your credit card bill is due.
Once you set up bill-pay reminders with Charlie, you can coast along and wait for a message that’ll let you know, “Hey! Your credit card bill’s about to be due!”
Your brain — and bank account — will thank you.
5. Start Saving Without Trying
Saving money is tough. So what if you could do it in a way where you wouldn’t even notice?
Digit makes that possible.
This innovative app automates saving for you. Simply link it to your checking account, and its algorithms will determine small (and safe!) amounts of money to withdraw into a separate, FDIC-insured savings account.
Bonus: Penny Hoarders will get an extra $5 just for signing up! Additionally, savers will receive a 1% bonus every three months.
Using this set-it-and-forget-it strategy, one Penny Hoarder saved $4,300 without noticing — read his Digit review.
If you need that money sooner than expected, you’ll always have access to it within one business day.
Digit is free to use for the first 30 days, then it’s $5 per month afterward.
6. Earn up to $22/Hour Picking up Milk For Your Neighbors
The grocery store is a surprisingly zen place. Somewhere between the soothing elevator music, the free samples and the wafting aroma of rotisserie chicken, you settle into a peaceful groove.
None of the stress of work or home — it’s just you and the aisles.
Some people, for some reason, don’t feel the same. They’d rather avoid it altogether. And with an app called Postmates, you could get paid to pick up a few extra groceries for them.
Even better than getting paid to grocery shop? If you need the money, like, now, you can cash out instantly after each delivery.
Holly Gaston, of San Francisco, California, has tried plenty of side gigs. With Postmates, she makes an average of $15 an hour. Plus, she says it’s been much more enjoyable than any of her previous side gigs.
Signing up shouldn’t take you more than about three minutes. The hardest part will be choosing which selfie you want to use as a profile pic.
Tiffany Connors is a staff writer at The Penny Hoarder.