Today on MoneyLife with Chuck Bentley

We're going to talk today about creative ways to pay off credit cards. Another kind of plastic is a gift card. Approximately $88 billion worth of gift cards were sold in 2008.

I appreciate when people give me cards but I don't like gift cards for three reasons:

1. 10% of gift cards go unused
2. Gift cards have an expiration date
3. You can only be used in certain stores

I like cash better. A recent survey found average credit card debt load carried by American households is $9,900, while 13% had balances in excess of $25,000.

We don’t know how that relates to household income of those surveyed, but obviously the debt load is high. Most of you who write want to get out of credit card debt. The average late payment fee is $35. credit card companies make money on fees. The average fixed rate on credits cards is 14%.

I want to talk today about practical ways to get free of credit card debt. It's the most important debt to pay off first. Our lifestyle is what has driven the use of credit cards.

We eat out more than ever before. Fast food restaurants find many people buy off the $1 menu using credit cards. if you pay your credit card at the minimum, every charge becomes the equivalent of a mortgage paid over years. This kind of debt just doesn’t make sense.

The top defensive strategy for getting out of credit card debt is to stop carrying credit cards. Credit cards are not evil, the issue is self control. If we’re abiding in the Spirit, we can have self control.

If you don’t have credit cards, you stop adding to your credit card debt. That's a necessary action for some people. Start paying for everything with cash. A recent study found if you carry a $100 bill, you’re less likely to spend it than smaller bills. I carry a $100 bill. So stop carrying credit cards, start paying for everything with cash, and carry big bills. It helps you live within your means.

The top offensive strategy for paying off credit cards goes like this: You can’t get out of debt until you create margin between your income and expenses, Margin allows you to get out of debt, save, and be generous. You create margin by living below your means. You may need to take steps to increase your income. When you eliminate a debt, you have more margin.

To decide which credit card debt to pay off first, make a list of all your credit card debts and include the amount owed and interest rate of each. Focus on paying off the debt with the highest interest rate first. Helpful links:

• CardTrak.com
• BankRate.com

Creative ways to pay off your credit card debt:

• Have the credit card company pay off your bill – contact your credit card company and humbly ask them to forgive late fees and lower your interest rate, tell them you intend to be faithful in paying off your balance
• Sell everything – start selling things you don’t need, look hard at anything you are paying to store, sell things on the Internet, get the best prices usually on a specialized Web site
• Sell ad space on your car – there are companies that will up to $400 a month to put an ad on your car, can do the same thing with your yard space with companies who do home repair work
• Bake cookies – cheap and easy to make, easy to sell
• Type/Proofread papers – if you have the skills, use them to make extra money
• Do your neighbor’s chores
• YouTube – help a business owner create a video for their Web site
• Play the middle man – there are Web sites that will pay referral fees if you can recommend someone for a hard-to-fill job
• Join Pay per Post – companies will pay you to write about their product or services
• Stop bad habits that cost you money
• Do odd jobs – check Craigslist or your local newspaper for jobs you can do
• See AutoWraps.com and FreeCarMedia.com

To get out of credit card debt:

• Stop using credit cards
• Start using cash, carry large bills
• Look for ways to earn more money and reduce expenses
• Create financial margin
• Apply margin to the highest interest rate credit card until you pay it off, then, go to the next highest one, and so on until all credit card debts are paid

Dos and Don'ts of Credit Cards

The primary cause of financial problems for most families is the misuse and abuse of credit cards.

• Read More

Credit Card Interest and Fees

By the Fair Credit and Charge Card Disclosure Act of 1988 credit card issuers are required to provide applicants with detailed information.

• Read More

Using a Credit Card

There is nothing wrong with using credit cards if people are able to discipline their use by following some very simple guidelines.

• Read More

Rollover Method for Paying Off Credit Cards

There is a light at the end of the debt tunnel. By applying some simple principles, you can begin to pay off credit cards and become debt free.

• Read More

Other Resources:

• ABCs of Money Package
• Career Direct
• God's Principles for Operating a Business
• Business By the Book
• Crown Mvelopes