New mobile sale apps help make a dent in your debt
If you're like many credit card holders, a balance of around $5,000 is glued to your accounts. You want to dissolve it, but increasing payments or spending less is arduous. To make a real dent, you need a major cash influx.
Where will that money come from in the absence of savings, though? Look to the very stuff you've charged or have accumulated in other ways. By parting with unnecessary valuables, you can apply the proceeds to the debt and gain instant relief -- and it's getting easier to do so every day.
Welcome to the virtual bazaar, accessible on any smartphone or tablet. Apps and specialized websites are making personal sales simpler, safer and more lucrative than ever before.
Goodbye yard sale, hello mobile sale
The old way to sell possessions was to drag them into the front yard and hope eager, cash-bearing customers would stop by. Then came Craigslist, where you post a "for sale" notice as you would a newspaper classified ad.
Yet dangerous dealings with selling to strangers have made many skittish. Earlier this year, Bud and June Runion of Marietta, Georgia, were murdered trying to buy a 1966 Ford Mustang from a seller on Craigslist. Online auctions, such as the original eBay model, are less anonymous as you can check a seller's history, yet the fees can run 10 percent of the purchase price, eating into your margin.
For these reasons, new apps and websites with mobile features that reduce safety concerns as well as costs are trending. OfferUp, VarageSale and Clamour are just a few that claim to list virtually any type of tangible, from antique church pews to zip gun tool sets. Others, such as Threadflip, cater to a specific genre of items, such as for clothes and accessories. All function similarly: just snap a picture of the item, upload it with a description and when someone bites, you complete the transaction.
Most people possess the technology to participate, too. A 2015 Pew Research Center report found that 64 percent of Americans have smartphones, complete with cameras and Internet access, and as of January 2014, 42 percent own a tablet computer. That's everything you need to get started.
Due to the success of Airbnb and Uber, there is a growing comfort level in interpersonal commerce, says Lewis Katz, founder and CEO of the New York-based Clamour. His company arranges for users to form groups of like-minded individuals on their website, with iOS and Android apps in development. Intimate social associations are key. "The sharing community has helped people come together and create efficient marketplaces," says Katz. "It makes people comfortable with buying and selling with people they trust."
[Mobile apps] are making it more convenient for smartphone users to sell unneeded used stuff around the house to pay down debt, and get their personal finances back in order.
Risk reduction is a chief feature of peer-to-peer sales. "We have to engineer a level of trust and transparency," says Katz. "Our marketplace is private. We verify who is part of a group and then create micro-geographies. If you work at Pepsi, we'll do it for you there; if you're a mom and want to start it for your neighborhood, great, that's another. There's a connection because everyone in your group shares the same interests. A local moderator is in place, so someone is actively managing the sale."
As for fees, they're dropping as the space becomes crowded. Clamour, for example, don't charge sellers anything to post, though they may add a small surcharge for credit card processing. And the Canadian company VarageSale has changed its policy so that all transactions are made in person, without any additional fees. Even eBay has dipped its toe into the game with its free Close5 app (available only in the San Francisco Bay Area, San Diego, and Las Vegas) that connects local sellers and buyers.
debt deletion strategy
Jonathan Poston, president of yiveo.com, a mobile app marketing agency in Asheville, North Carolina, was a former personal finance instructor at Warren Wilson College, and is a proponent of deleting card balances using new technology.
Mobile apps "are making it more convenient for smartphone users to sell unneeded used stuff around the house to pay down debt, and get their personal finances back in order," says Poston, who credits the speed of the process. "Items can be posted for sale in just a few taps."
Just how fast? "You can have it out of your house that same day," says Katz. "Sixty percent of the stuff up here is sold within five days."
Rapid response was just what Texas A&M University graduate Maria Garcia needed. She recently used OfferUp to unload items to get back on track with her creditor. "I was stressing big time," says Garcia.
"I had almost $4,000 on my Discover bill that my mom couldn't help me with," says Garcia. "They were starting to call me a lot because I didn't pay for three months. Seriously, I was getting sick. Scared, you know. But I was packing things up and let me tell you, I did not need half of that stuff. I had a TV, like a whole entertainment set. I put the app on my phone and, boom, I got $500. Then I put a watch I didn't like and got $100. It was crazy. So easy!"
Bobby Lee, a San Francisco-based credit expert and host of 2 Minute Finance, a video blog that teaches personal finance skills to millennials with short attention spans, is a fan of using the peer-to-peer marketplace to achieve a positive net worth. "These apps make the process of posting an item, selling it and receiving the payment even easier than before," says Lee. "And for someone in debt, it's a quick solution to earning some fast cash."
Imagine how roomy your house will feel after all the junk is gone.
2 Minute Finance host
Almost everyone has something to sell
Think you have nothing of value? Take a deeper look at what you own. One in 11 U.S. households rent a storage unit for unused things, to the tune of $1,000 per year in rent, according to the Self Storage Association. Even if you don't have a separate space brimming with clutter, check drawers, closets, the garage and your yard.
You may identify an astonishing number of items that don't hold much value to you anymore, but might to someone else. These include early model cell phones, extra dish sets and stemware, barely worn ski jackets, exercise equipment collecting dust, double sets of tools and skateboards the kids won't touch anymore. An additional benefit is paring down to only way you need and want. "Imagine how roomy your house will feel after all the junk is gone," says Lee.
When you've got some goods to part with, assign value by checking comparable items for sale online, or use an app specific to your market. WorthMonkey, for instance, will provide a price estimate by typing in your product into the search bar. Many of the peer-to-peer sites and apps also have this function.
Have fun with the process. You're entering a world where people are passionate about products and feel strongly about deals. There is a voyeuristic quality to the personal buying and selling sites and apps, explains Katz. "It's reality show meets marketplace."
And now for the glitches ...
Although selling unused personal items to reduce obligations can be a smart personal finance strategy, says Poston, it's important to remember that it isn't a sustainable way of paying off debt that continues to rise: "At some point, debtors will obviously run out of stuff to sell, so this strategy should only be used sparingly, and as just one tactic among many in restoring the personal finance balance."
"I did stop selling stuff because that was basically it," says Garcia. "Now I have to pay the real way. I have to get a job!"
Also, choose the app or website carefully. Not all companies developing these mobile sales functions are equal, so check rates and actual users' reviews. Just forget depending on a lengthy business history. This is startup territory and many arrive on the scene with great fanfare, then fizzle fast. Case in point: the FOBO app, which was supposed to revolutionize the used consumer electronics space, promising that items would sell in 97 minutes, guaranteed. The app launched in early 2014, then crashed months later.
Finally, don't think that you're too old to use technology to your advantage. "The initial crop of peer-to-peer selling apps has been geared toward the more tech-savvy generation. But with the launch of eBay's Close 5 app, there's a clear movement in the industry to target consumers of all age groups," says Lee. Posten agrees: "It's not just a younger demographic using mobile apps now; the whole world is making the shift."
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