Americans currentlyowe more than $1 trillion in collective credit card debt— and that number has grown in recent years. And, given how widespread credit card debt is, there’s a chance that you share in the national credit card debt total. If that’s the case, you probably want to eliminate your credit card debt as quickly as possible.
After all, credit card debt is expensive thanks to interest charges, and interest rates on these revolving accounts are usually variable. So, as the federal funds rate was hiked over the past two years, your credit card interest rates probably went up, too.
As your minimum payments grow, you may feel like you’re stuck with overwhelming credit card debt, but there may be ways to free up enough money to make a dent in your debts. One way is to cut expenses, but it’s important to make sure the sacrifices you make are as minimal as possible so that you’re more likely to stick to your debt relief plan.
Tired of credit card debt? Cut these expenses to eliminate debt fast
“Generally, credit cards or personal loans, like cash advance or payday loans, have very high interest rates,” says Ron Tallou, founder and owner of Tallou Financial Services. Interest rates on these accounts are “normally in the high teens, 22% or 25%,” or even higher.
“Therefore, those types of debt are bad to have, and you’ll want to get yourself out of them as soon as possible,” Tallou says.
But what if you’re barely able to make your minimum payments? How can you free up extra cash to get out of debt faster? Here are five ways to cut your expenses without making significant sacrifices:
The average American eats at a restaurant three times per month, according to a recentUS Foods survey. They also order takeout or delivery 4.5 times per month. For simplicity’s sake, let’s say each of these meals costs $20. That works out to a total cost of $150 per month to eat food at a restaurant. That’s an easy expense to cut.
Don’t worry; you don’t have to commit to eating every meal at home, though. You could save a meaningful amount of money by eating out half as often. That extra money could help you get out of debt faster.
The average American household spends just north of $25 per month on unused subscriptions. Cancel your unused subscriptions to free up funds for your debts.
It’s easy to spend $3 or more on a cup of coffee at a coffee shop. For many, $5 or $6 per cup may seem more realistic. If you go to the coffee shop every day, that number adds up quickly. You could be spending anywhere from $90 to $180 per month on coffee.
On the other hand, it only costs about a quarter to brew your own cup of coffee at home. That’s a savings of between $2.75 and $5.75 per day — or between $82.50 and $172.50 per month — that could be used to help eliminate your high-interest credit card debt.
If you still have cable TV, you’re likely paying $90 per month or more for it. If that’s the case, it’s time for you to cut the cord and move toward streaming services. You can access high-quality streaming content for around $10 per month. That’s $80 per month that you could use to pay your debts off faster.
Americans typically spend more than $5,700 per year ($475 per month) on their commute to and from work. There are a couple of creative ways you can cut this cost:
Opt for a bicycle: If you live close enough to your job to bike to work, taking your bike instead of your car is a healthy financial and physical decision. You could cut the cost of your commute to virtually zero while increasing your physical activity.Carpool: If biking isn’t an option, consider reaching out to coworkers you live near for carpooling opportunities. You could cut the cost of your commute in half by sharing it with a coworker.
The bottom line
High-interest credit card debt can be a big burden to carry. If you’re struggling to make your minimum payments, it may seem like you’ll be in debt forever, but you don’t have to be. Eliminating or reducing the expenses above can help you to allocate more of your funds to getting out of debt.
If you’re still struggling to make ends meet and pay off debts after cutting costs, it may be time to reach out to a professional for help.Today’s leading debt reliefcompanies can helpconsolidate your debtsat a lower interest rate or even settle them for pennies on the dollar — significantly reducing your monthly payments.