WITH DECEMBER nearing its end, Americans still have time to tackle their credit card debt before the new year.
Those who are close to paying off their credit card debt have a few unique options they can keep in mind, including a different way to use their points.
Credit card balances can look scary to some, but here are four ways you can earn money towards lowering those numbers.
It’s important to note that these tips may work better for clearing smaller debt amounts. But they may still be able to make a dent in a larger debt balance.
1. SHOP THROUGH CASH BACK
If you plan to shop for some essentials like a household restock at Target or CVS, you may want to consider trying to earn cash back on those purchases.
There are browser extensions and shopping portals that you can use that let you earn cash back on purchases, such as Rakuten.
read more on credit cards
Rakuten allows shoppers to get up to 10% cash back at over 3,500 stores, such as Sam’s Club, CVS, Macy’s, Best Buy and Bloomingdales.
Some banks roll out cash back deals frequently. Bank of America offers “BankAmeriDeals” to some account holders, which allows them to earn cash back on a variety of stores. Some frequent offers include cash back at Starbucks.
By redeeming your cash back, you can put money back into your account that you can use toward paying off your debt.
2. REDEEM CREDIT CARD POINTS
If you’re racking up a large amount of credit card points, you can redeem them as a statement credit.
While many opt to save up points to use them for traveling to score cheaper or free hotels and flights, they may have some use toward your debt.
By redeeming them as a statement credit, you can put that money toward lowering your balance.
Some credit redemptions come in at a value of one cent per credit card point, according to CNBC.
Chase Bank broke down an example of how a credit card company may offer you 1.5 cents redemption value toward traveling but only one cent redemption value for cash or direct deposit.
If you had 35,000 credit card points, you could possibly receive $525 in travel credit but only $350 that could be put toward a credit card payment.
“Taking this option to use points for cash can sometimes really help keep your balance down to strengthen your credit score,” Chase Bank explained. “But it really depends on the amount of reward points you’ve accumulated, the overall size of your debt and your lifestyle.”
How to boost your credit score
Here are two tips to help boost your credit score
Limit your usage
- Part of your credit score comes from how reliable you are at paying off borrowed money whether its a 25-year-long mortgage or a quick grocery run.
- One factor that significantly impacts your credit score is the utilization, which is how much of your total limit that you use.
- Each credit limit is different, but you should use only around 30% of that limit to help maintain or boost your score.
Get credit for uncredited payments
3. SELL ON RESALE APPS
If you have some spare time to clear out items in your house, you can consider reselling some items to make some extra cash.
If you have any old toys, Halloween costumes, furniture, home goods or clothing that you can part ways with, instead of throwing them out you can consider selling them on apps and websites.
There are multiple places you can advertise items online, such as Facebook Marketplace, Mercari and Depop.
However, it’s important to note this may not be a fast way to make some money as listings can sit untouched for weeks before someone inquires about your product.
There are also instances where a customer may try to negotiate the price that could result in you getting less money than you hoped for.
But, you never know what people may be on the hunt for. So if you have an old table and chairs set, camera, or gently used stuffed animals just collecting dust, you may be able to sell them for money toward a credit card payment.
4. USE YOUR HOLIDAY BONUS
With the holiday season approaching, some employers provide a bonus to workers as a token of appreciation.
If you receive a cash bonus instead of a physical gift or extra time off, it may be worthwhile to put it toward your credit card balance.
While it can be tempting to spend it on a physical gift for yourself for the holidays, you can gift yourself some peace of mind with a lesser credit card balance.
Even if the bonus or part of it doesn’t wipe out your balance completely, decreasing the amount can provide some relief and lower how much additional interest you may accrue.
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