5 Creative Ways to Reduce Your Debt

by The Happy Rock on July 22, 2008

cut up credit card

This is a guest post contributed by Heather Johnson, who writes on the subject of Discover rewards programs. She invites your feedback at heatherjohnson2323 at gmail dot com.

Whether we can officially call the economic downturn we’re currently experiencing a recession, we can all agree that it’s harder and harder to keep your head above water these days.  If you’re like me and in debt then you are feeling the pinch even more so.  Being in debt is always a terrible feeling but it’s worse when your dollar just doesn’t go as far as it used to.  The high gas prices and soaring cost of food have made being in debt as bad as it’s been in decades.  While there are no easy ways to get out of debt, there are ways we can stem the tide.  Here are a few ideas for you as you try to crawl out your umbrella of debt:

  1. Cut up your cards or toss them away for the time being. Consider relying on cash for the foreseeable future.  This will put you in a position where you are weaning yourself off your reliance on credit cards.  You may want to keep a low interest credit around for extreme emergencies.
  2. Talk to your boss about a raise. This may sound like the boldest move you could make but it’s not so far-fetched.  Presuming you have a good track record at work you could be in line for a promotion or a raise.  Go to your boss and talk about your options.  Express desire to take on more responsibilities.  Being proactive will increase your chances at earning that much needed raise.
  3. Be proactive. Talk to your lenders personally and let them know you’re taking ownership of your debt.  This will make them more likely to be lenient if further problems arise down the road.
  4. Get the best deal you can on your utilities. This is a great way to increase your savings.  Spend some time online and find out if you’re overpaying for any of your utilities.  20 or 30 bucks a month off your bills will go a far way in helping you confront your debt issues.
  5. Be creative. If you own your house or rent an apartment with an extra room, consider renting out it out to pick up some extra cash.  Look around and see if you have any appliances or anything of considerable value that you can sell to increase your cash flow.  Now is the time to make cash and if you have to think outside the box then so be it.

{ 6 comments… read them below or add one }

Polina July 23, 2008 at 9:03 am

Wise points, especially the one advising to switch from cards to cash – when you can SEE the amount of money you spend daily (as with credit cards loss of money is not THAT obvious). Agree that it is vital to keep an eye on what you buy, and where you can buy the same thing + save a penny…
Raise is the best option, but the most difficult to get…


nick July 23, 2008 at 9:36 am

I really like your “be creative” part. Most people don’t think to be creative when it comes to saving money. Also see what you can go without. That will not only save you from spending, but allow you to put extra money towards you debt. Also, when asking for a raise, be sure to focus on why you deserve it and not because you are in debt. Looking for a better job is also an option.


Diana July 24, 2008 at 9:40 pm

I’ve ever read a tip to innactivate credit cards for moment by freezing it. This way is less extreme than cutting. The writer said that whenever we need to use the cards we can liquid the ice block…But, I’m not so sure if this is safe for the card. I have not trie it myself.


The Happy Rock July 28, 2008 at 4:11 pm

@Diana – I know people have done it and it hasn’t effected the card. I still like cutting them up though.

@nick – I agree being creative is a great idea, although you don’t want to pass up obvious time proven solutions and get to creative either.

@Polina – You are right, getting a raise has a huge long term benefit but is often tough in most situations.


Tom October 27, 2008 at 9:54 pm

Cutting up the cards is definitely the way to go. It’s too easy to whip out the card for things gas, or even small purchases like a latte at starbucks. It all ads up and if you don’t have it you wont spend it.

I’ve also read that deactivating the card signals the credit agencies that you don’t trust yourself with credit so cutting the card up is a better way to go than deactivating it I hear.


Lisa P November 17, 2008 at 4:48 am

Being creative is not a bad attribute. When it comes on reducing our debt we must be really creative about this. The credit disaster is still in full swing. It’s vital at this time that those of us that have credit worries looming, engage in credit repair, but there’s something that’s even more vital. We must teach our kids about money management, lest they meet with the same fate in the future. Visual aids, savings plans for stuff of their own, there are many great methods for teaching kids to be money-smart. They also need to know about the three biggest items of credit that they will deal with in their lifetimes, and those are cars, houses, and perhaps the most dangerous of the three, credit cards. All three can land anyone in boiling hot water very quickly, and it is vital that our children be taught about responsible use and planning from an early age. Many Americans have to resort to credit repair services, and while there should be no stigma about it due to the behavior of the credit industry of late, it is better to have planned properly, which is precisely the lesson our children should learn.


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