Live debt-free: Barter as Tool for Debt-reduction

You may think this a silly option in the 21st Century, on the contrary. In my own experience with debt (as mentioned in previous posts) and my quest to pay off these debts, I wrote the department stores where I held credit cards with a brief proposal.

I explained my financial situation. If you choose this approach, it should be brief and factual, about 2 paragraphs. In the letter, I asked whether said department store would be open to considering work as a form of repayment. I specified by asking whether they would allow me to work in one of their departments, including their administration offices (as that was related to my professional experience). Instead of paying me a salary, I proposed they apply it to my outstanding store card balance.

Only one store replied positively and although they had never received such request before, they were willing to give my proposal a try. They hired me as their Secret Shopper. I worked with them on my days off from my regular job. My balance wasn’t high at $800 but by not being able to pay off the balance through my regular income, it demonstrated that, for me, it was too high. I worked the equivalent of one month at minimum wage to pay off the store’s credit card. The work was easy and pleasant and I made sure to do it well and with all my energy.

It may not be obvious, but to me it was important I cut up the card as soon as I had a $0 balance, so as not to repeat this part of my debt cycle. As I tackled my debt, With APRs between 19% and 30%, store credit cards easily become debt traps that are hard to break out of. I firmly resolved to never have a store credit card again.

Another way to use barter as a debt-reduction tool is to research organizations, associations, and clubs who operate on a barter system. Explore what they have to offer and whether you have skills, services or products you can exchange for your debt. Examine whether this is something you can be a part of, especially if you’re cash-strapped, unemployed or, between jobs.

Also, instead of buying items you might need, you may be able to swap them for items you no longer need. Here is one example and another one here. The last one appears to have a global exposure. And then there is this one here, it is for business purposes and appears only to be available in the USA and Canada.

If the above examples are used, as a way of conducting business, be aware that such barter is subject to business/income tax. Generally, Taxation tends to be based on what the same item would fetch at fair market value. In such cases, you should find out what information your local tax office has on the subject.

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