How to reduce credit card interest rates
How can I reduce credit card interest rates?
Credit card debt can pile up fast and furious thanks to high interest rates, but you have ways to reduce credit card interest rates and get your debt back in check. Double-digit interest rates can eat you alive, but you may be able to survive with a few strategic moves. Going for a low interest credit card or balance transfer credit card may help reduce your interest rates.
Compare credit card rates now to see what credit cards are available to reduce credit card interest rates.
What can I do to make sure I’m not scammed?
A major caveat when it comes to reducing credit card interest rates is falling for a scam from a company that promises to reduce interest rates and pay off your debt in record time. The scams frequently come in the form of phone messages and can even ask for a fee up front, warns the Federal Trade Commission .
The major reason such offers are scams is because such companies can end up not delivering on their promises – although they will still be quick to take your money for services never rendered. The FTC notes they also cannot do anything for you that you could not achieve on your own without paying them a cent.
Did you talk to your credit card company about low interest credit card options?
You have just as much sway with your credit card issuer as the next guy, and that includes the robocallers. Calling your credit card company and simply asking for a reduced rate can work wonders – or at least possibly lead to a reduction, according to U.S. News .
An effective strategy with businesses has always been to see if they can match a great deal you saw somewhere else. With this strategy in mind, tell your credit card company’s customer service representative that you have an offer for a balance transfer credit card that charges 0 percent interest.
Then ask if they can instead work to reduce your current credit card rate or if you should go with the balance transfer credit card. U.S. News warns this strategy may not be as effective as it was when the economy was booming, but it doesn’t hurt to give it a shot.
Can you make a balance transfer to a low interest
rate credit card?
If your credit card company does not budge to reduce interest rates, you can always make good on your bluff. Many companies offer a zero percent credit card interest for a grace period when you first obtain the card as a promotional tactic.
Take advantage of the tactic by opting for the balance transfer credit card so you can spend the grace period with your payments going toward paying off the debt, rather than high interest rates.
U.S. News does warn about two possible joy killers using this method: the credit card transfer fee and the interest rate after the grace period has run its course. If the grace period ends only to leave you with a higher interest rate on your balance transfer credit card than you have on your current card, you may want to skip it.
You may also want to skip the balance transfer credit card if the transfer fee ends up higher than your current interest rate. The transfer fee is usually a percentage of your total balance due, which can really add up if you owe a lot of money.
Can you borrow money?
Borrowing money to pay off your debt or instead of using more credit to finance a purchase or investment is another way to save money. A social lending site, family, and friends are potential places from which to borrow.
You generally need to write up a proposal for why you need the money and submit it to social lending sites, at which time people will bid on it. The better your proposal, the more bids you will get, and the lower your interest rates will go.
Borrowing from family and friends requires a legitimate loan contract, although a good pitch or proposal won’t hurt there, either. Unless you draw up a loan contract, money borrowed from family and friends could be considered a gift and taxed accordingly.
U.S. News advises checking to ensure the interest rate on the loan is higher than the ARF, or Applicable Federal Rates, dictated by the IRS. Otherwise, the loan may not be considered legitimate.
So start with a phone call to your credit card company and ask for a reduction in your credit card interest rate.
If that does not yield results, use our credit card finder now to research low interest credit cards or balance transfer credit cards that may help.Source: www.creditcardchaser.com