Tiff’s financial tips round–up

UPDATED to correct an error caused by my lack of math skills.

I’m trying — as you probably know — to pay off some massive credit card debt. And apparently I’m not the only one. The average American has $8,562 in credit card debt.

As a result of my high debt load, I’m always looking for and thinking about ways to pay it down faster, avoid late fees and beat high interest rapes rates.

Stuff I (erm, sort of) practice and preach (credit given where I can remember that credit is due. #2 is my own idea though):

• Pay more than the minimum each month. That’s the only way to make a dent in the principal of your loan.
• Take advantage of direct deposit, online banking and the ability to schedule payments. You know when you’re getting paid, right? You know when the bill is due, yes? Schedule accordingly.
• Take lunch from home whenever possible. Let’s say you’re spending $7 per day on lunch, five days a week, 50 weeks a year (you do get two week’s vacation don’t you?). That’s $1,750 per year. Take a TV dinner for lunch — let’s assume a cost of $3.50 / meal — instead, and you spend only $875.
• Take mass transit if you can. New Yorkers already know this :-). In Atlanta MARTA is $1.75 each way ($3.50 per day). Compare that to my commute which costs about two gallons of gas and the $50 per month fee for a parking permit at my job, or $3 per day to park at a nearby lot. That works out to about $5 – $7 per day depending on gas prices. Plus mass transit has other benefits:
  • I get exercise I wouldn’t otherwise get (a minimum of a mile per day between my office and the train).
  • I can read, meditate or listen to music while on the train.
  • I save myself the stress of driving in Atlanta traffic.
  • I’m doing my part for the environment.
  • I’m saving some wear-and-tear on my car.
• Call your card companies and threaten to cancel if they do not give you a lower interest rate. I was able to talk one card company down from a 19.9% APR to a 14.9% variable APR — which as of right now means I’ve got an interest rate of about 8.9%. If your credit card company won’t give you a lower rate, transfer the balance to a card that will. Somebody wants your money. Your job is to give it to them on the best terms.
• From Clark Howard: Pay your debt off 75 percent faster by making half of your regular payment every 14 days. Now if you, as I do, get paid monthly, this may be hard to do. But give it a shot.

Just a few thoughts for anyone who is in the same spot.