4 Ways to Get Cash Fast and Avoid Credit Card Debt

how to avoid credit card debt

Cars break down. Furnaces stop working. Emergencies happen. Sometimes you need a couple thousand dollars in a hurry, but according to a study from Bankrate, only 37 percent of Americans have enough cash on hand to cover a $500 or $1,000 emergency.

Credit cards can be useful when you need cash in a hurry, but with millions of Americans wondering how to avoid credit card debt, reaching for plastic is the last thing many people want to do. How can you come up with cash in a hurry to pay for an emergency without using credit cards? Here are some ideas to get you started.

How to avoid credit card debt

Sell your junk online

Finance blogger Adam Baker was over his head in debt, and couldn’t see a way out. Then he and his wife saw an unconventional path to debt freedom. They could sell their excess “crap” on Craigslist, eBay, and other platforms to turn their stuff into cash.

It worked, and they made over $6,500. Adam’s Man vs. Debt story resonates with so many people because we live in a consumer culture. We buy things, enjoy the thrill for a few minutes, then throw them in the back of the closet where they get dusty.

Look at your storage unit, attic, closet, garage, and drawers. I would be willing to bet that most of you have old electronics, collectibles, and other stuff that you can quickly sell to come up with enough cash to cover an emergency.

Pick up a side gig

Instead of lazing away your evenings in front of Netflix, considering using your spare time to take on some extra work. If earning money is a hobby and motivator for you, find odd jobs and gigs to make more money on the side.

Look to Martin Dasko as an example, who decided to try Uber as a way to earn extra income. He admits that it is far from passive income, but working on busy weekend evenings can lead to a great payoff.

No car? No worries. There are tons of ways you can earn on the side. Everyone has a skill that someone is willing to pay for. Whether you know how to code, use Quickbooks like a boss, or can knit like nobody’s business, everyone can offer a service or product that someone wants. Be creative, think outside the box, and turn your passions into cash.

Use savings, then replenish

Everyone should have an emergency fund—if you don’t, start saving now before crisis hits. It’s possible to start a savings fund even if you are still paying off student loans.

Most finance experts suggest having emergency savings that would cover three to six months of living expenses in the event you lose your job or something big comes up. Emergencies really can happen at any time. Case in point: Once I was driving home from work and my check engine light turned on; a few days later, I was buying a new car. Without emergency savings, I would not have had the down payment I needed.

The best way to save an emergency fund is automatically. If you don’t already have one, open a savings account. Talk to your employer’s HR department to find an option to split your direct deposit, or schedule an automatic transfer from your checking to savings account once a month. Each payday, a little more money will be deposited into your savings account. Even if it’s only $20 per pay period or 1 percent of your income, that balance will add up over time, and you’ll have it when you need it.

Once you pass your savings goal, you can use extra cash in your savings account for additional student loan payments or to start a Roth IRA.

Use a credit card, pay it off

Let’s say you do have enough cash in your savings account to cover the emergency. (Phew!) Does that mean using a credit card to cover the expense is a bad thing? Not necessarily.

As an avid travel hacker, I use my credit card to pay for everything. Each time I make a purchase, I get valuable miles and points that help me travel the world for a fraction of the price most people pay.

Credit cards are not all bad, and they can be used as a tool to help you achieve other goals. However, if you are going to use credit cards, make sure you have enough saved up to pay for the entire expense, in full, every month.

Credit card interest is expensive—typically three or four times higher than student debt. Don’t get stuck in an expensive trap with credit cards. Pay them off in full each month to avoid any interest charges and you can use credit cards worry-free.

Emergencies and unexpected expenses are stressful enough on their own. As you learn how to avoid credit card debt, these tactics for getting spare cash fast can solve your expensive problem without having to swipe your plastic.

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