by Moe Zilla

Created on: August 06, 2010

Yes, it's really possible to pay off your credit card debt using a free government-approved grant - but you have to do it very carefully! The Federal Government obviously isn't issuing straight "credit card debt elimination grants" to anybody - they're issuing grants for other purposes. But if you can obtain grant money in a lump sum, it's obviously tempting to immediately reduce the balance being carried on your credit card. This would save you all the interest and late payments that you'd otherwise incur in the months to come - and you could then direct that much of your monthly income towards the original purpose of the grant.

If the grant was intended to cover a long period of time, then in theory you'd just be loaning yourself the money to pay down your credit card debt - and then paying yourself back with your future earnings. Eventually you'd pay back the full amount - that is, however much of the grant money was used on credit card debt. Obviously it depends on the terms of your grant, and you don't want to risk doing anything illegal. Some grants have very stict accounting rules, so make sure you know exactly what you're doing.

What's the best way to find a real government grant? There's two URLs you should know. First there's CFDA.gov - the Catalog of Federal Domestic Assistance. And there's also a separate web site that's dedicated just to government grants called - what else? Grants.gov !

But watch out - this is a very popular topic in search engines, and many web sites have been set up to try to attract your attention. In 2006, the Federal Trade Commission even issued a warning to consumers, advising them that many "free grants" are actually scams. "Some scam artists advertise 'free grants' in the classifieds, inviting readers to call a toll-free number for more information. Others are more bold: they call you out of the blue. They lie about where they’re calling from, or they claim legitimacy using an official-sounding name like the 'Federal Grants Administration.'" In many cases, these people are simply hoping to trick you into revealing the number for your bank account, or to shake you down for a processing free. The FTC suggests applying some common sense to these offers. "If you have to pay money to claim a 'free' government grant, it isn’t really free."

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