When you are dealing with high credit card interest rates, you need to find a way to deal with this problem. This is especially important if these rates are the reason you cannot seem to pay off the amount you owe. Luckily, you can accomplish your goal by utilizing different strategies for reducing your interest rates.
Ask for Lower Rate
Your first option for dealing with high interest rates is to contact each credit card company and just ask for a lower rate. Some companies have policies in place that allows them to reduce your rate, but you have to ask. These companies will not generally lower any interest rate on their own; they wait until their customers ask for a reduction.
However, if they offer you a lower rate, it is important to ask how long the reduction will last. For many companies, the temporary reduction is only to allow you the opportunity to pay down your credit card balance.
Additionally, these companies make most of their money from the interest amounts they charge. This is the reason why some of them will not lower their rates at all.
On the other hand, long time customers with accounts in good standing have a much better chance at getting a reduction. Credit card companies want to keep their loyal customers happy so that they will continue to use their cards.
Consolidate Your Debt
When you cannot get a lower rate that you like, your other option is to consolidate your debt. The premise is to apply for a consolidation loan and use the money to pay off debt that comes from credit cards, personal loans, or car loans that have a higher interest rate. Find a law firm that will help you consolidate your credit, like David Reynolds & Associates.
When looking into this option, you want to pay close attention the interest rates and the scheduled payment amounts. Some of these loans are for a specific amount of time and you do not want to choose one that requires you to pay a higher monthly amount. The idea is to pay off your debt, but not to increase your monthly payments to the point where you cannot pay on this loan.
An upside to this option is that many consolidation loans have a much lower interest rate. When you start looking into this type of loan, it can be nerve racking to think of owing a bank so much money.
However, you need to remember that you already owe that amount to other companies. You are simply combining the debt so you can stop paying extremely high interest rates. With this option, you are also only making one payment each month, which makes tracking finances a lot easier and less stressful for you.
Another advantage of this option is that after you have paid them off, you can choose to cancel your credit cards that have the highest interest rates. By doing this, you can avoid using the cards again and creating more debt that you would need to pay in the future. Whichever method you choose will help you to pay off your high credit card interest and debt.
Share14 July 2015
