It’s going to get more expensive – and possibly a lot more expensive – to carry credit card debt in 2017.
Of course, credit card debt is never cheap. Those 15 percent and higher interest rates make sure of that. However, those rates are likely to climb even higher in the next year. That’s because many experts predict that the Federal Reserve will raise its interest rates three to four times in 2017, and every time the Fed’s rates go up, your credit card’s rates typically go up by the same amount.
While it’s no big deal if that happens every once in a while, a flurry of rate increases within a year or so can have a real impact on your credit card bills – to the tune of hundreds of extra dollars. Call it Reason No. 2017 to make this the year you conquer your credit card debt. While that may sound daunting, it’s not impossible.
Here are 17 ideas to help you reduce your debt in 2017.
1. Put an extra $10 per month toward paying off your credit cards
If you have $3,000 in credit card debt and a 20 percent interest rate, just paying an extra $10 each month (upping your payment from $150 per month to $160) would cut your payoff time by two months and save you more than $50 in interest.
2. Have a garage sale
We all have things of value we don’t use, and every little bit of extra income you can put toward that debt can make a difference.
3. Make a budget and prioritize
You can’t really attack your debt until you know how much is coming in and going out each month. Get that figured out, then look at where you can find extra funds.
4. Get a zero percent balance transfer card
Issuers are offering zero percent periods that are up to 21 months long. Forgoing interest for that long can have a real impact on eliminating high-interest debt.
5. Ask for a raise
6. Ask for a lower interest rate from your credit card issuer
You’d be shocked at how often this works. Data show that about 80 percent of those who ask are successful, but hardly anyone ever asks.
7. Take on a part-time job
This may not be what you want to do, but desperate times sometimes call for desperate measures. Even a few extra work hours and a little bit of extra cash can make a big difference.
8. Get your side hustle on
How about working for yourself instead of working for someone else? Love dogs? Start a pet-sitting business. Brilliant at math? Offer to tutor kids in your neighborhood. Your skills have value. Take advantage of them.
9. Cash in rewards points
If you’re sitting on a pile of unused credit card rewards points, consider redeeming them for cash back instead. No, it’s not the most cost-effective way to use those points. But if they can help you make a dent in your debt, it’s worth considering.
10. Fix errors on your credit report
Many Americans have errors on their credit reports that are costing them money without them knowing about it. Get your credit report from Experian, Equifax and TransUnion – the three major credit bureaus – for free at annualcreditreport.com, sniff out any mistakes and report them immediately. Having them removed can be like a steroid shot for your credit score, which you can then parlay into lower interest rates and reduced debt.
11. Enter a debt management plan
You can enlist a credit counselor to work with your creditors on a plan to pay down your debt. You’ll send a single predetermined amount each month to the credit counselor, who will then dispense the money to your creditors. Don’t enter this arrangement lightly because you will likely be asked to cut up all your cards as part of the plan, but it is something to consider if your situation turns dire.
12. Lean on family
A supportive family can make a huge difference in your ability to pay off your debt. Be open and honest with your spouse or partner about your situation and work together to see how he or she might be able to help. Do be aware, however, that borrowing money from family can be fraught with peril, so it is important to be cautious.
13. Shift more of your debt payments to your highest-interest credit cards
The higher the interest rate on a credit card, the more rapidly your credit card debt will increase. While it might be pleasing psychologically and give you a sense of accomplishment to pay off the cards with the smallest balances first, the best way to actually reduce your debt load is to shift more of your monthly payments toward cards with high APRs.
14. Send your tax refund to your credit card issuer
Millions of Americans get a tax refund each year. Use that cash to make a dent in your credit card debt.
15. Think “temporary sacrifice.”
If someone told you that dropping cable or a gym membership for just a few months could trim several months from the time it takes to pay down your debt, would you do it? Thinking of it as a temporary measure can make it easier to take. You might even find it motivating.
16. Consider a personal loan
This isn’t about borrowing from your spouse or your parents. This is about consolidating your debt. If you can land a low or no-fee personal loan with a significantly lower interest rate than your credit card offers, it might be worth considering. There is risk, however. Be absolutely sure that you stop using your credit cards once you get the loan. Otherwise, the personal loan just becomes extra debt instead of helping you kill off your previous debt.
17. Ask for forgiveness
This is a big step and should not be taken on a whim. If the situation is serious enough, it might be possible to get some of your debt forgiven, meaning that you wouldn’t have to pay all that you owe. Just know that it’s not a magic cure-all. It’ll wreck your credit, and you’ll likely have to pay taxes on the forgiven amount.
Article originally posted on USnews.com