I am in a lot of debt. Credit card debt, student loan debt, medical bills, and yup, those dreaded loans from family members. I really want to get out from under all this and I am trying to make extra payments to pay off these debts as fast as possible. I try to make any extra cash that I can and keep my costs low, but another way I pay down my debts is by earning gift cards.
How Can Gift Cards Pay Off My Debt?
It seems strange at first to think that a gift card to Walmart will help me pay down my debts, but it really works. Gift cards are really just cash that can be used at only one particular store. If I am planning to making a purchase from that store anyway, then why not transfer the money out of my budget for that item and use it to pay off debt?
How Do I Get Gift Cards?
First, sign up sites and mobile sites where you can earn gift cards for completing simple tasks and surveys. My favorite sites for earning gift cards quickly are MyPoints, Memolink, Swagbucks. The best mobile apps to earn gift cards fast are Mobee (use code VNJW for $3 when you sign up!), CheckPoints, and Shopkick. In fact, just yesterday I earned a Target gift card from Shopkick! Next, complete tasks and surveys to get points. Sometimes that means taking photos of a store display, scanning an item in store, shopping online, or visiting websites. These actions will all earn you gift cards. I also earn gift cards through using my debit card linked to my Capital One Premier Rewards Checking account. I earn a point for every dollar I use my debit card for and those points add up quickly and get cashed in for gift cards a few times a year. If your bank doesn't offer points for using your debit card (debit card! not a credit card! I use my debit card for everything!), you should seriously consider getting a checking account that does. Those suckers add up fast.
What Kind of Gift Cards Do I Get?
There are many, many survey sites, websites, and apps out there that will pay you in points redeemable for gift cards. No matter what company you sign up for, make sure they offer gift card options for companies that you shop at regularly or which offer services which you need and regularly use. Target, Walmart, and any other stores that sell grocery items are a good bet because you will always need to buy groceries. Also, gift cards to gas stations like Exxon, Shell, and BP are something you can always use as well. Jiffy Lube gift cards come in handy also since you will have to get your car’s oil changed sometime anyway. Even Amazon gift cards can allow you to buy essentials you need around the house, or maybe that new lamp you were planning to buy anyway. Most importantly, check the gift card options for any company that you sign up with and make sure that they offer cards for companies which are local to you and which represent sectors of your budget that you will be spending money on anyway, like gas and groceries. Remember, get gift cards for the stores near you, not the gas station or grocery store that is across town and not near your normal commute.
But Don’t Some of These Sites offer Paypal or Visa Gift Cards?
If you sign up with a survey site or app that will offer payment in Paypal or Visa gift cards, that may be your best option because you can apply those funds directly to your debts. But before you cash out, double check the redemption thresholds as it is often the case that it takes more points to cash out for a $25 Paypal payment than for a $25 gift card to Target. Additionally, there may be additional processing fees for Visa gift cards or Paypal payments, so make sure to read the fine print online. If you do choose to cash out via Visa gift card and your debt cannot be paid by credit card, follow the instructions below for how to convert the card into cash.
How Can I Convert this Gift Card into Cash for my Debt?
Converting the gift card into cash is a simple budget substitution exercise. When you have cashed out your points for a gift card, substitute that $25 gift card for cash from its corresponding category. For example, if you got a $25 Target gift card, take $25 out of your grocery budget category and move it to your debt repayment category. Whether you do this with an envelope system or on a spreadsheet, the effect is the same. Don’t think of the gift card as extra money you can play with for a new sweater at Target, it is grocery money. Make sure also that you go to those stores to use your gift cards and don’t lose them. If you follow this method and cash out $50 in Target gift cards and $25 in Exxon gift cards in a month, you’ve just transferred $75 out of your grocery and gas budgets into your debt repayment budget, making an extra $75 that month to help you shovel your way out of debt. Every bit helps!