5 Steps to Pay off Credit Card Debt When You’re Married
You got hitched. Tied the knot. Said your vows.
“For better and for worse.” Gulp!
All too often, that “for worse” part can involve money. Credit card debt is a particularly difficult hurdle. If one or both of you is bringing a hefty dowry of credit card debt to the marriage, it’s a perfect chance for you to see what kind of teamwork you can really do.
Being married doesn’t make credit card debt worse, but it does make it more important that you address it. You have a life to build together. Step one is cleaning up that ugly remnant of earlier times.
Put your heads together and follow these five tips to tame the union of marriage and debt.
1. Consolidate Your Debt With Your Spouse’s
When you think about how much debt you each have, you might feel a little anxious.
That’s where a company like Fiona can be helpful. It can help you find personalized lending options to refinance or consolidate your debt to potentially save thousands dollars in interest.
Fiona will show you all the lenders willing to help you pay off your credit card and eliminate the headache of paying bills by allowing you to make one payment each month.
If your credit score is at least 620, you can borrow up to $100,000 (no collateral needed) and compare interest rates, which start at 4.99%. The idea is to secure a loan at a lower interest rate, potentially helping you save thousands. Repayment plans range from 24 to 84 months.
Take, for example, Katherine, who faced $12,000 in credit-card debt. Holding her back? The 15.24% interest rate. By refinancing with a 5%-interest, seven-year personal loan, she saved $12,000 in interest.
If she’d kept on the same road, she would have paid something like $14,000 in interest alone over 25 years. Yikes.
So even if you’re simply curious about what’s out there, know that checking rates on Fiona won’t hurt your credit score — and can probably save you in interest.
2. Say ‘I Don’t’ to Bad Car Insurance
Now that you’re a team, you probably have two separate vehicles and two different car insurance policies. It’s time to bundle those together. But don’t just assume your current car insurance company is the best bet. What if you had settled for the first person you dated?
We’ll pause here to let that really sink in. OK. Moving on.
Have you shopped around for car insurance lately? Have you compared rates from the 20 largest auto insurers that do business in your area? That sounds kind of difficult and time-consuming, doesn’t it?
Fortunately, a service called Gabi will do it for you, and you don’t even have to fill out any forms. Simply link your insurance account and provide your driver’s license number, and Gabi will go to work.
Once you link your insurance account to Gabi, it will:
- Scan your existing insurance plan.
- Analyze what coverage you have.
- Compare the major insurers’ rates for that same coverage.
- Help you switch on the spot if it finds you a better rate.
Gabi says it finds an average savings of $720 per year for its customers.
It is a true apples-to-apples comparison at the same coverage levels and deductibles you currently have. Once you sign up, you never have to shop again. Gabi’s software has your policy on file and keeps on monitoring for savings as your life changes. You know, like when you need a bigger car for all the babies.
By saving money on your car insurance, you’re freeing up cash you can put towards that credit card debt each month.
3. Strip Down… Your Household Costs
Where else can you find some money you can put toward your debt? Easy. There are a few ways you can take your everyday expenses and strip them down.
Download TrueBill, an app that’ll negotiate your bills, cancel unwanted subscriptions and refund your bank fees. On average, Truebill says it helps customers save more than $700 a year by lowering their bills, canceling unnecessary subscriptions and getting refunds.
Do you shop online? One of our secret weapons here is called Capital One Shopping Price Protection — a free tool that gets you money back for your online purchases. It will scan your email for any receipts and help you get a refund when it finds a price drop.
Speaking of shopping online, the Ebates Cash Back Button is a browser extension that’ll let you know if you could be getting cash back, using a coupon code or even getting a better price on a different site when you shop online. Bonus: You’ll get a free $10 gift card to Walmart after you make your first purchase through Ebates.
If you need to buy stuff, you may as well get it shipped right to your house and get a little cash back in the process, right? Great way to stash some extra funds to put towards those credit cards!
Disclosure: Capital One Shopping Price Protection compensates us when you sign up using the links we provide.
4. Adult Together — and Get Rewarded for It
You’re married, and that means you pretty much have to face it: You’re an adult. While it may not be as fun as being a kid, kids don’t get honeymoons, so there is that.
We found an app that rewards you simply for adulting. As an adult, you don’t typically get rewards for doing things that are expected of you… until now.
This app kind of rules them all: MoneyLion, a free all-in-one app for managing your personal finances.
MoneyLion offers rewards to help you develop healthy financial habits and will literally pay you for logging onto the app.
You can earn points in the rewards program by paying bills on time, connecting your bank account or downloading the mobile app.
You can redeem those points for gift cards to retailers like Amazon, Apple and Walmart.
If credit cards aren’t your thing, MoneyLion is like having a rewards credit card without the temptation to overspend.
The app also connects with all your bank, credit card, student loan and other financial accounts. Based on your income and spending patterns, it offers personalized advice to help you save money, reduce your debt and improve your credit.
Paying off your credit cards means making payments on time, every time. MoneyLion can help motivate you to do that and possibly help you find other ways to save. This app and your phone is a marriage made in heaven.
5. Nickel and Dime Away Your Credit Card Debt
One thing doesn’t really change when you get married. Saving money is tough. So what if you could do it without even noticing?
Digit makes that possible.
This innovative app automates saving for you. Simply link it to your checking account, and its algorithms will determine small (and safe!) amounts of money to withdraw into a separate, FDIC-insured savings account.
Bonus: Penny Hoarders will get an extra $5 just for signing up! Additionally, savers will receive a 1% bonus every three months.
Using this set-it-and-forget-it strategy, one Penny Hoarder saved $4,300 without noticing — read his Digit review.
If you need that money sooner than expected, you’ll always have access to it within one business day.
Digit is free to use for the first 30 days, then it’s $2.99 per month afterward.
When you use the money you save on Digit to pay off your credit cards, you can watch that debt melt away a little at a time.
It’s a Team Effort
You’re not in it alone anymore. Join forces with your spouse, set up a plan and give yourself little rewards for milestones as you make strides towards paying off that credit card debt.
It’s a team effort now, and you can do it!
Now, deciding what’s for dinner? That’s a much more difficult hurdle.
Tyler Omoth is a former senior writer at The Penny Hoarder.