Credit card debt is the number one obstacle to getting ahead financially.


Those little pieces of plastic are so easy to use, and it's so easy to forget that it's real money we're dealing with when we whip them out to pay for a purchase, large or small. Despite our good resolves to pay the balance off quickly, the reality is that we often don't, and end up paying far more for things than we would have paid if we had used cash.

How to Easily Find Money to Pay Down Credit Card Debt

1. Borrow From or Cash Out of a Cash Value Life Insurance Policy

Do you have a small cash value life insurance policy that’s collecting dust, or even worse, costing you money each year? If so, you may want to consider borrowing from the cash value, or possibly even canceling the policy altogether.

Cash value life insurance for younger people is almost always a bad investment. In some cases, your parents may have taken out a policy on you when you were young, or maybe you were sold a policy by an insurance agency. Either way, you likely only have a minimal death benefit, and a cash value that is earning very little interest. If you’re paying 10, 20, or 30 percent on your credit card debt each year, you’re probably doing more harm than good by keeping the policy. Once you get caught up on your debts, you can look into a much more affordable term life policy.

2. Sell Non-Retirement Investments

If you have some investments in regular taxable accounts, either in the way of savings bonds, CDs, or even mutual funds or stock, it may make sense to sell some of those investments to apply towards your debt.


While any gains on these investments are taxable as capital gains this year, compare the total amount of tax you’ll pay compared to the amount you’ll save by reducing the debt and paying less in high credit card interest. You may just find that you're better off paying the taxes on the capital gains and reallocating that cash towards your debt.

3. Sell Some Personal Items

Most people have a lot of stuff that just collects dust in the garage or the basement that is no longer being used. While we always think we’ll have a need for that old guitar or nostalgic video game system, they are probably just taking up space.

Consider having a yard sale, or even placing items for sale on olx to make some extra money. While selling just one or two items for Ksh 200 won’t work miracles on your debt, selling a few dozen items for Ksh 200 just might. Even generating a few extra hundreds will put a dent in your debt, and you’ll also be cleaning up your house or apartment at the same time!

4. Cancel Subscriptions

A monthly subscription is a serious drain on anyone’s budget. Each subscription itself seems small and very affordable. Ksh 300 per month here; Ksh 200 per month there. Alone they may not be a big deal, but while any one subscription may not seem like much, when you have ten or more of these subscriptions each month, it can literally cost you a few hundred dollars a month. Canceling, or even just downgrading, a handful of your monthly subscriptions can free up a nice chunk of change each month.

Are you paying extra each month for a 1GB mobile data plan when you never go over 600MB ? Are you receiving the weekly edition of the newspaper when you really only have time to read it on the weekends? Do you receive magazines that you don’t get much value out of, or could just browse online?

These are all items you can downgrade or eliminate and free up money each month to apply towards debt.

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