Reduce Credit Card Debt by Selling Unwanted Gold & Silver

POSTED ON March 30, 2024
Reduce Credit Card Debt by Selling Unwanted Gold & Silver

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Americans currently carry over $1.13 Trillion in credit card debt. Trillion, with a “t”. Or $1,130,000,000. That’s a seemingly astronomical, mind-boggling number, especially for a financial “tool” that is unusual for most of the world. Americans know credit card debt is bad, but it’s so normalized that it’s easy to waive it off as just part of life. But high-interest credit card debt is debilitating to financial security, and finding a way to pay it down or eliminate it – such as selling your unwanted gold, silver, and platinum – can go a long ways towards financial security.

reduce credit card debt

Credit card debt can get out of control quickly. Often sparked by a an expensive event you can’t immediately cover, you start carrying a balance on your credit card, and it becomes normal. You can’t pay it off, so you keep paying a high interest rate and the debt doesn’t go down much. Something else happens, and your balance increases again.

Maybe your car breaks down, and you need to pay $1000 to keep life moving. A few weeks later you son needs some new clothes and shoes, and maybe you charge a nice dinner to celebrate an anniversary. Then you get sick, miss some work, and need to use your credit card to pay for everyday expenses while barely covering your rent. All of a sudden, you’re $3k in debt, paying a couple hundred per month and not seeing your balance move much.

You may even reach your limit and start taking out more cards. You’ve probably heard the stories of people with 5+ credit cards all carrying significant balances.

This is the story for so many people living paycheck-to-paycheck in the US. And all the financial gurus (like the very popular-at-the-moment Dave Ramsey) will tell you, credit card debt is absolutely killer. You’ve got to make a plan and do whatever you can to get rid of it.

Credit card debt is bad for several reasons:

  1. High Interest Rates: Credit cards typically carry high-interest rates, often much higher than other forms of debt such as mortgages or car loans (10%, 15%, 20%, or more). This means that if you carry a balance on your credit card, you’ll end up paying significantly more over time in interest charges.
  2. Snowball Effect: Credit card debt can quickly snowball out of control if not managed properly. Making only the minimum payment each month can lead to a cycle of debt where you end up owing more and more over time due to accruing interest.
  3. Negative Impact on Credit Score: Carrying high levels of credit card debt can negatively impact your credit score. Credit utilization, which is the amount of available credit you’re using, is a significant factor in credit scoring models. High credit card balances relative to your credit limits can lower your score.
  4. Financial Stress: Being in debt can cause significant stress and anxiety. Constantly worrying about how to make payments and dealing with the burden of debt can impact your overall well-being.
  5. Long-term Financial Goals: Accumulating credit card debt can hinder your ability to achieve long-term financial goals such as saving for retirement, buying a home, or starting a business. The money spent on interest payments could be better utilized for saving and investing.
  6. Limited Financial Flexibility: High levels of credit card debt can limit your financial flexibility. It may become difficult to respond to unexpected expenses or take advantage of opportunities when a significant portion of your income is tied up in debt payments.

Credit cards can be convenient and useful financial tools when used responsibly. If you pay off your balance every month and collect your “rewards”, then credit cards are perfectly fine. But carrying a balance and accumulating debt on them can lead to significant financial challenges.

I’m stuck in credit card debt. What should I do?

The answer of course is to pay it off as quickly as you can. The better question is “how?”

Paying off credit card debt requires a strategic approach and commitment. Seriously, we wish it were easier. And if you’re only a couple thousand dollars in debt, it may be as easy as selling some old gold to get you out from under it. But don’t let falling into credit card debt become a habit. Learning some healthy financial habits will not only help you get out from under credit card debt, but stay more financially sound.

If you have a significant amount of high-interest debt, here’s a step-by-step guide to help you tackle your credit card debt:

  1. Assess Your Debt: Start by gathering all your credit card statements and listing out the balances, interest rates, minimum payments, and due dates for each card. This will give you a clear picture of your total debt.
  2. Create a Budget: Review your monthly income and expenses to create a realistic budget. Allocate as much money as possible towards paying off your credit card debt while still covering essential expenses like rent, utilities, groceries, and transportation.
  3. Prioritize Your Debts: Consider using either the debt avalanche or debt snowball method to prioritize which credit card debts to pay off first.
    • Debt Avalanche: Pay off the credit card with the highest interest rate first while making minimum payments on the others. From a financial perspective, this makes the most sense.
    • Debt Snowball: Start by paying off the credit card with the smallest balance first, then move on to the next smallest balance. While the “debt avalanche” method makes the most fiscal sense, from a psychological perspective the “snowball” can be more motivating and give you a stronger feeling of progress.
  4. Cut Expenses: Look for areas where you can reduce spending to free up more money for debt repayment. This might involve cutting discretionary expenses like dining out, entertainment, or subscription services.
  5. Generate More Cash: Explore opportunities to increase your income, such as taking on a part-time job, freelancing, selling items you no longer need, or asking for a raise at work. Of course, here at Cash for Gold Mailer, we’ll gladly take the gold, silver, diamonds, and platinum that fall under that “items you no longer need” category. Many people are sitting on hundreds if not thousands of dollars in gold collecting dust (often inherited or purchased long ago), which could be put to better use paying down debt. If you’d like an appraisal for your gold, request a free gold mailer today.
  6. Negotiate Lower Interest Rates: Contact your credit card companies and inquire about lowering your interest rates. You may be able to negotiate a lower rate, especially if you have a good payment history.
  7. Consolidate Debt: Consider consolidating your credit card debt with a balance transfer to a card with a lower interest rate or consolidating multiple balances into a personal loan with a fixed interest rate. Be cautious of balance transfer fees and make sure the new terms are favorable. A lot of the blogs on financial sites will try to sell your personal lines of credit or suggest you take a line of credit from your home to pay down debts. This isn’t a bad idea if you do it responsibly (although mortgage rates are much higher than they used to be, so it’s not as strong advice as in years past), but be very careful about opening up more credit.
  8. Make Extra Payments: Whenever possible, make extra payments towards your credit card debt beyond the minimum required. Even small additional payments can help reduce your balance faster and save you money on interest.
  9. Stay Motivated: Track your progress regularly and celebrate small victories along the way. Seeing your debt decrease can provide motivation to keep going.
  10. Seek Help if Needed: If you’re struggling to make payments or feel overwhelmed by your debt, consider seeking help from a credit counseling agency or financial advisor. They can provide personalized advice and assistance in developing a debt repayment plan.

Paying off credit card debt often takes time and discipline, but with a solid plan and commitment, you can achieve financial freedom and peace of mind.

pile of gold to sell

gold chains & bracelets

Selling gold, silver, & platinum to reduce debt

Gold has the reputation of being a stable, safe investment that rises over time and is a hedge against inflation. Especially older people who lived through the rise in gold prices from the 70s through the early 00s see gold as a worthwhile investment.

That attitude has lead to a lot of gold inheritance. Given the average lifespan of 79 and the average birth age of about 22 in the 1970s (which has been steadily increasing), it’s common for children to inherit gold in their 50s. This mean Gen Xers (ages 43-58) are typically the recipients of this, who also happen to be the generation in the most credit card debt, carrying an average balance of over $9,000 according to CNBC.

Some of this gold may be referred to as family heirlooms, which understandably you’d want to hold on to. But in many cases, such as designation is pretty generous for what are pretty unnoteworthy old rings and necklaces. Keep your favorites, but consider selling the rest to improve your financial situation. Reducing stress and improving your financial situation is something most parents would value more than borderline sentimentality. Whatever makes us happiest.

To learn more about the process, you can read our 5 Tips for Selling Your Gold Jewelry.

We’ve had customers with parents or grandparents that horded gold bit by bit and ended up with $10,000, $20,000 or even more worth of scrap jewelry that they were able to use to really improve their life.

If you’re interested in selling your gold, request a free gold mailer pack today and get a fast, free appraisal for your gold and other precious metals.

Using credit responsibly

Even if you are able to sell gold or something else to dig yourself out of credit card debt, learning to use credit responsibly is vital in staying that way. It’s easy to fall back into the trap, and eventually you’ll run out of things to sell to get yourself back on equal ground. So while selling your gold and silver, or something else like old artwork, books, electronics, clothing, or other collectibles is probably a good financial move at the moment, don’t count on it forever.

Learning how to take care of your finances is a very valuable skill (at which point you can come to us to sell your gold so you can put it in stronger investments, rather than just pay down debt!). So while selling your gold is a valuable tool to help you get in a stronger financial situation, do your best to understand budgeting and financial planning to help stay out of credit card debt and other predatory, high-interest loans.