Free Money for Paying Off Credit Cards Update

In a previous post I answered a reader's question about getting free money for paying off credit cards.

I mentioned that some sources suggested to use a credit counseling agency to contact a lender and ask them to settle for a lower amount. I suggested AGAINST this because many of these agencies are scams and when you can actually get your lender to settle for a less amount it will negatively affect your credit score.

What I didn't mention was suggestions for lowering credit card rates. I was reading an article at Consumerist.com which suggested this and they report enough successes to make it worth trying.

I also didn't mention other ways for lowering credit card debt. That was a mistake I'll rectify here:

1. Negotitiate Better Credit Card Rates
2. Go Cash-Only, Don't Use a Credit Card except in Emergencies*
3. Start a Debt Snowball (pay off one credit card at a time)
4. Set Up a Budget
5. Cut Back Expenses

• Give up unnessesary expenses: Cable, land line phone, gardener, gym membership, eating at restaurants, etc.
• Get items for free or by trading.
• Use Coupons and don't waste food.

*For #2, I would suggest one alternate habit to form once your credit cards are paid off. Use a rewards credit card for every purchase and pay off the balance in full every month. (If you don't have the money in a checking or savings account to pay off the credit card, then don't use the credit card). That way you don't pay any interest and you get the rewards for free.

These were all suggestions that I found on another article at Consumerist.com. The article was titled: Reader Pays Off $14,330 In 20 Months With Our Tips. This was a great article. Very motivating and encouraging.

Hope this helps. Good luck to all those out there who are reaching for financial freedom.