5 Step Guide On How To Live Off Credit Cards

living-off-of-credit-cards

This is not a revolutionary statement and it’s not earth-shattering. The truth is everybody goes through desperate times. That’s right, even Bill Gates, Donald Trump, Carlos Slim, the richest people in the world. Everybody goes through ups and downs, that is just the fact of life. If you can go up, you can go down. The good news is that if you go down, you can go back up again and that is just the nature of business and the economy.

Many people lose their jobs through no fault of their own because businesses slow down, the economy slow down, customers stop ordering, that kind of thing. Everybody goes through desperate times. If you are employed in a company that had to lay off people, this advice can help take care of your family through desperate times.

Follow the steps below so you can live off credit cards during desperate economic times.

Step 1: Apply for low interest, no fee cards

Obviously you need to follow the step before you get laid off. If you have no job, chances are you might not qualify for any credit card, that’s why it’s important that if you see the handwriting on the wall to start scrounging around then get on the internet and start searching for credit cards that have low interest and no fees. You need these cards because they can help you survive really lean times. The earlier you start, the better.

Step 2: Find cards offering interest free cash advances

Once you have filtered down the list of credit cards you find online to the ones that charge low interest and have no fees, you should look for cards that have multi-month interest free periods. This is important. This can make or break your little credit card project. Why? This multi-month interest free period is crucial because you don’t want to be paying for the money that you’re borrowing for a long period of time. Thankfully, there are many cards as a promotion, allow credit card holders to get cash advances and pay no interest for several months.

The rule here is the longer, the better. If you can find a six-month interest free period, go for it. If you can find one year interest free period then that is even better. The point is you need to find cards that have interest free periods that span several months.

Step 3: Forward your balance from one card to the other

Once you have four or five cards that have very low interest rates and charge low interest for several months, you can then start with one card and pay no interest on it, wait several months until the card is ready to charge you interest and then forward that balance through the cash advance feature to the next card that doesn’t have interest. The key here is to keep shuffling your debt from one card to another without paying interest.

If you do this right and you time it right, you basically get thousands of dollars of spending credit that can tide you over while you’re getting a new job, learning a new skill, going back to school or basically just getting your act together. You have to time this right and you have to pay attention to the credit card statements or you might be in for a nasty shock.

Step 4: Pay as much as you can before each forward

Chances are, while you’re going through tough times financially, you won’t be making zero money. There will be a source of income whether you’re doing some online part time jobs, freelancing or helping friends and relatives with work around the house. There will be some sort of trickle of income. Obviously, you need to pay your expenses first but try to save up as much of that extra income to partially pay for the cash advance that you’re pushing forward from one card to the next.

The goal here is to keep paying down the debt in tiny little nibbles with each forward until you reach a point where none of your cards no longer have an interest-free promotional period and it’s time to pay. If you play this game right, by the time you reach that point, your remaining balance will be very minimal.

Step 5: Reduce your expenses

This is a crucial step. In fact, this is a step that you should be doing at the same time as Step 1. While you are embarking on rotating your debt among several credit cards so you can live off credit, you need to reduce your expenses. This way, if you do get some occasional income from time to time, you will have enough saved left over so you can pay down your revolving debt. In other words, the more you reduce your expenses, the more resources you have to take care of Step 4 above. If you do this right, you will get out of your tough financial times with no debt and with brighter hopes for the future.

One thought on “5 Step Guide On How To Live Off Credit Cards

  • February 4, 2014 at 1:06 am
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    While it is true that these steps may work for a short time, I would like to urge caution before anyone embarks on building up credit card debt that they cannot afford.

    In my opinion, the number one rule for personal finances is not to spend more than you can afford. Once that rule is heeded, credit cards can be a great way to earn cash backs and rewards, but borrowing on credit cards sets one on a dangerous path to high fees and interest charges once the zero interest period is over and options to roll over the debt become scarce.

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