It is Time for a Lower Credit Card Rate

By: Randy

How would you like your credit card interest rate? Regrettably, this is a simple question that few customers take the time to ask , It can be very high. High interest rate on your credit card balance can impose some damage on your wallet . A higher rate means higher finance charges, and hurts your ability to pay down your debt.

If you dint look carefully at your rate when you get your card, don't be scared , here are some ways for you to reduce your high interest rate and get a better grip on your debt :

1. Dispute the rate - First thing, let's find out exactly what rate you're paying on your cards. Is that your Visa card smacking you at an interest rate of 19.8%? And that department store charge card - are they really charging you 29%? Yes, those high rates are not unusual, and chances are probably pretty good that whatever you are being charged, you are probably paying at rates that are much too high.

Considering that banks are now paying savers from 3 to 4 % interest on savings accounts and certificates of deposits, then turning around and charging consumers 3-5 times that amount to borrow money, you'd think they have some room to give you a lower rate. They do - it's just up to you to negotiate to receive it. Here's how: Contact each of your creditors directly and see if they will reduce the rate on past purchases to a more reasonable level. Let's say you get them to agree on 12%. If they accept the new rate, you'll have automatically shortened the time it takes to pay off your debt without increasing the amount you pay monthly. Our advice would be to increase your monthly payment even more to get yourself out of debt sooner.

2. Go shopping - for another card. What if the creditor won't settle a lower rate? Then be a good customer and shop for another card. Your mailbox is probably stuffed with new credit card offers. By the way, the internet is a great place to find credit cards. Find one that will give you a low, fixed interest rate - somewhere between 6 and 12% - preferably with a 0% transfer rate on your balance. Once your balances have been transferred, cancel the old credit cards .You simply don't need the temptation of an open line of credit.

3. How about a loan? There are basically two types of debt link loans - consumer and home fair loans. Anyone can get a consumer loan, but you obviously need a house for the second loan. These types of loans only work if the interest rate you pay is low. Be careful of unseen fees and charges and make sure you fully get a grip of what your new interest rate will be.

If you own a home and you've built up some equity value in your home, you'll want to opt for the home equity loan. Rates tend to be lower, and the interest you pay may be tax deductible. Make sure that you can afford the monthly payments of both a home equity loan and a mortgage before you commit to this option.

Debt is trivial matters, and it goes hand-in-hand with high interest rates. It's going to take some of the tactics we mentioned earlier, along with a good dose of discipline, to pay down your debt. But if you followed that two-pronged assault, you'll soon find yourself debt free and in good financial shape.

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