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The hunt for extra cash
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December 12, 2001: 6:34 a.m. ET
Some ingenious cost-cutting measures can help credit card debt disappear.
By Annelena Lobb
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NEW YORK (CNN/Money) - Do you cringe when your credit card bills arrive? You're not alone.
These days, Americans rack up plenty of high interest rate debt with their plastic. Myvesta.org, a credit counseling agency, surveyed 1,000 people and found they each had an average credit card balance of $2,814. The average American household, meanwhile, carries $8,523 in credit card debt, with about 12 credit cards per household, according to Cardweb.com.
But if you want to save for new goals, or just have better things to do than pay for a vacation you took four years ago, wiping out credit card debt should be your top priority. It might help to make that your New Year's resolution.
To downsize your debt load, of course, you'll have to pay more than the minimum on your cards -- in fact, you'll want to pay as much as you can while still leaving yourself enough access to cash for vital expenses. (That means food, rent, and transportation -- not shopping sprees or dining out.)
Experts say almost everyone can squeeze a hundred extra dollars out of their paychecks each month without feeling the pinch; money that can be applied to their credit card balance.
Besides looking for money in the pockets of old coats, try these (relatively) pain-free ways to raise extra cash.
Cut your energy bill.
The average household spends $1,338 a year on energy costs, according to the U.S. Department of Energy. Forty-four percent of that bill goes to heating and cooling your home and 33 percent to lighting, cooking and appliances.
But the Department of Energy also said you can save up to 10 percent on your heating and cooling bill by turning your thermostat down 5 to 15 degrees for 8 hours a day (typically, while you're at work or asleep). If you replace 25 percent of the lights in high-use areas with energy-saving fluorescents, you can cut about 50 percent of your lighting bill.
According to their numbers, you could save about $280 a year by following both of these guidelines.
Reduce your banking fees.
These days, the annual price of maintaining a checking account (based on average banking fees) is between $190 and $218. According to Beth Kobliner, author of "Get a Financial Life: Personal Finance in Your Twenties and Thirties", only one-fifth of ordinary banks offer free checking -- meaning no monthly service fees, minimum balance requirements, etc.
To avoid high banking fees, see if you can join a credit union. Check with the Credit Union National Association (CUNA) to see if you are eligible. According to Kobliner, about two-thirds of credit unions offer completely free checking and no minimum balance requirement. They also tend to charge lower rates on loans and pay higher rates on savings accounts. The folks at CUNA say a credit union can save you up to $200 a year in fees.
If you aren't eligible for a credit union and can't find a bank that offers free checking in your area, consider banking online. The average monthly service fee on an interest checking account at Internet banks is $6.61, compared to $10.85 at traditional banks, according to Bankrate.com. Over the course of the year, it could add up to a savings of $50 in fees.
Keep your car fit.
If you change the oil yourself every 3,000 to 5,000 miles, you can save up to a few hundred dollars a year and help preserve the life of your car, according to the InCharge Institute, a non-profit organization that helps consumers take charge of their finances. If you are unable or unwilling to perform this service yourself, check for coupons in the mail and in the paper for reduced-price oil change deals.
Keep your tires properly inflated. Underinflated tires gobble more gas. (Remember when you rode your bike on a tire that was going flat, and had to work harder to peddle? Same idea.) According to a 2001 American Automobile Association study, 15 percent to 20 percent of all tires are underinflated. For every pound per square inch that a tire is underinflated, you can lose up to 2 percent of fuel economy. If all four are underinflated, that's 8 percent.
Review your auto insurance policies.
If you have been using the same auto insurance company for years and have a clean driving record, shop around for cheaper insurance. It's very likely another company will make you a better offer than what you have now, said Carolyn Gorman, a vice-president at the Insurance Information Institute. "You could save up to $300 on the annual cost of auto insurance," Gorman said.
If you have an older car, worth $1,500 or less, consider dropping optional coverages like comprehensive and/or collision insurance. The cost of your premium is more than you'd ever get back from an insurance claim. If you drop collision and/or comprehensive coverage, you can save up to 10 percent off your premium costs, Gorman said.
Get a seasonal job.
If you can swing it, take a Christmas job this year -- lots of department stores and other retail outlets offer holiday jobs. According to the National Retail Federation, sales associates at department stores made about $10 an hour in earnings in 2000.
Sometimes folks who work full-time take a holiday retail job on the weekends for supplemental income. If you're a college student home on break, or currently unemployed, you may be able to get a full-time gig for a month or so. In either case, if you can handle holiday shopper's rage, the extra money will help you put a dent in those bills.
Do your laundry more efficiently.
Brian Sansoni, a spokesperson for the Soap and Detergent Association, said the average person generates well over a quarter ton of dirty clothes per year. According to the Department of Energy, 14 percent of a household's energy bills goes to heating water. And a clothes dryer is one of the most expensive household appliances to run.
"For the best cleaning and energy savings, wash most loads in warm water and rinse all loads in cold water," Sansoni said. "Presoak stains and heavy soils before washing to get the best stain removal without using extra hot water."
To cut down on drying costs, Amy Dacyczyn, author of The Complete Tightwad Gazette, said hanging four loads of laundry a week -- rather than putting them in the dryer -- could put $100 back in your pocket over the course of a year.
Make monthly savings fun.
Matt Coffin, CEO and founder of LowerMyBills.com, recommends you do the things you like more cheaply rather than set an unreachable monthly savings goal.
"A candlelight dinner with great wine will cost only $40, while at a restaurant it may cost $100. Do that once a month, and at the end of the year, you've saved $720 on entertainment costs," Coffin said.
And, of course, apply any raises or extra bonuses you get on the job toward your debt. That's money you won't miss because you aren't accustomed to having it.
But more important than any savings strategy, experts say, is discipline. All the extra dollars in the world won't do you a bit of good unless you apply it to debt and set new financial goals for yourself that include budgeting for the future. Don't forget, excessive spending is what got you into trouble in the first place. 
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