Debt Reduction

5 Free (And Inexpensive) Ways To Reduce Your Debt

If you want to rapidly reduce your debt, the best thing you can do is make extra payments, as often as possible, to your creditors.  But, there are some other things you can do – things that are free or inexpensive – that can help.

1.  Make credit card payments as soon as possible.  Most credit cards charge interest based on your average daily balance.  The sooner you make a payment, the lower your average daily balance will be, and this helps to reduce the amount of interest you have to pay.  (The exact formula for interest calculation varies from card issuer to card issuer.  Contact your credit card issuer and ask them how they calculate your interest.)

2.  Call creditors and ask them to reduce interest rates.  Credit card companies want your business.  Simply call your credit card company and ask for a reduced rate. Obviously, they might say no… but they might say yes!  You’ll never know until you call.

3.  Transfer balances (carefully).  I hesitate to mention this one, but a balance transfer, if done correctly, can help to reduce your interest rates.  But, you must avoid a few pitfalls.  First, be sure that you understand the fees associated with the transfer.  Second, be sure that you aren’t just “moving money around“.  If you think you are ready to take the plunge, you might want to check out this list over at Five Cent Nickel (one of my favorite personal finance blogs) of credit card companies that are offering zero-percent interest on balance transfers.  Be aware, most credit card companies charge a balance transfer fee.  Be sure that you run the numbers before you make the transfer.  Don’t pay the fee unless you will see a significant, long term reduction in rates.  And, be sure that you can pay off the balance before the low, introductory period expires.

4.  Sell your stuff and use the proceeds for debt reduction.  I’ll admit, this one requires a little more work than the previous three.  But, it works!  Do you have “stuff” – clothes that no longer fit, electronics you no longer use, books you’ll never read?  Instead of storing it, why don’t you spend a few hours going through your stuff and making a plan for selling some of it?  Personally, I like to sell baby clothes on eBay and we also have an annual garage sale.  Getting rid of clutter feels awesome – and the proceeds can go towards your debt reduction!  (eBay charges a small fee to list your items.)

5.  Have a plan.  It happens over and over.  You get excited about reducing your debt.  You promise yourself that you are going to put the credit cards away, pay off your balances, and get serious about getting out of debt!  But, inevitably, after a few months? weeks? days? you fall off the wagon, get discouraged, and fail to make progress.  What’s the problem?  What happened?  Debt reduction requires three things – determination, money, and, a plan!  So, sit down tonight and create a plan for reducing your debt.  May I suggest the No Credit Needed Debt Reduction Guide?  (Also available as a free E-Book.)

When it comes to getting out of debt, there are no shortcuts.  But, if you work hard, focus, and use some of the ideas listed above, you can do it!

If you have tips of your own, I’d love to read them.  Leave a comment and share!

8 thoughts on “5 Free (And Inexpensive) Ways To Reduce Your Debt

  1. We pay our mortgage two weeks early every month. It’s only a tiny savings but I figured out that it will save us one whole payment at the end. I know that doesn’t sound like much, but it doesn’t cost us a thing to send the money as soon as we have it rather than wait til the payment is due.

  2. @Ashley: That’s a great idea, and it does work out to be a lot at the end, even if it “doesn’t sound like much”.

    @NCN: Your constant reminders of how important it is to “Have a Plan” is imperative to succeeding! I’ve tried multiple ways to get myself out of debt, but it hasn’t worked until I actually wrote (typed) out an actual plan to follow. It’s currently hanging on our fridge, alongside our debt snowball reduction spreadsheet.

  3. I had an interesting balance transfer offer lately. Chase dropped my interest rate *substantially*, & I called in to check up, as it’s the ‘catastrophic life-emergency’ back-up until I have a fully established fund. They, of course, offered me a balance transfer, but refused to send the details in the mail. Are they afraid of mail fraud, or just that I’ll not like what I’ll read? Probably they’re going for the impulse-buy & that’s a standard tactic. Of course, I refused unless I had a postal mail offer in writing, & they didn’t press, which I found quite odd. I guess nothing surprises me w/ variable rate cc’s anymore!

  4. Free is good! Patrick, I like your comment about putting your plan on the fridge. Out of sight, out of mind has been my motto for way too long. We will be using a 3 day weekend to plan. Thanks NCN, good stuff.

  5. I completely agree with number 4. It has made a huge difference in our debt by selling off the closet full of some day projects, all the things we don’t use and misc junk we don’t really need. Not only has it paid off by earning us several thousand off of the garage sale and ebay sales to put towards debt, but it has helped declutter the house which in turn helps our attitudes.

  6. I am a new visitor to your site. If you don’t mind, I would like to add you to my blogroll at I started my own debt blog in April and I still have a long way to go. A long way.

    You have a lot of useful information on your site.

  7. When used properly, balance transfers on credit card debts can be a great way to reduce your debts. By moving onto an interest-free card for a set period, you have a set period to throw all your extra cash at your debts and reduce them substantially while you aren’t wasting money on interest payments. Why pay interest when you can pay none? Do it long term by switching each time your interest free period ends and you can turn this practice into serious long term savings.

  8. All great advice. I would like to mention one thing though. A well plan budget will do wonders in reducing your debt. Knowing what your expenses are and where you can save money will help you get out of debt sooner. Also, as one debt is paid off, forward that leftover monthly payment onto a new debt. This will also help get you out of debt sooner. Good article.

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