How Can You Lower Your Credit Cards Interest Rates

Tuesday, August 2nd, 2011
Updated: August 2nd, 2011
The content is accurate at the time of publication and is subject to change.

Until the global economic meltdown, American consumers have readily enjoyed the benefits of availing credit card offers. To combat the severe financial crisis, banks and financial institutions nationwide have devised stringent laws to restrict the access of credit cards and have cut back their introductory rates, rewards programs and extra privileges. In spite of such grave situation you can still preserve your ability to obtain credit at most attractive rates.

While, it is true that several renowned banks will continue to stiffen lending standards and eliminate perks, yet you can guard yourself against poor credit history and prevent falling in trap of “never being able to completely pay-off” your credit card debts. Read on to find some unique and smart moves that will help you bat out of challenging debt situations.

More often than today, credit card companies are offering lucrative deals on credit cards with higher interest rates, especially to their existing customers. Initially the bargain seems to be real smooth, but soon the consumers realize the high interest rates that prevent them from ever paying off their debts. This leaves them emotionally and financially exhausted and build a bad credit score that puts them on the receiving end eventually.

Are you facing a financial turmoil due to your bad credit card score? Worry no more! Read on to find out how you can reduce and eliminate your bad debts.

Maintaining a good credit score is the key to obtaining lower credit card interest rates. Making monthly payments on time; and trying to pay a little over the top of the minimum payment is a wise move for creating an improved financial history. Further, it brings peace to your mind knowing that in no time you’ll be able to pay-off the debts wholly.

Once you have made the payments in full and final, it is best to get rid of them, so you won’t be tempted to re-use them. Initially, you may discover the feeling of desperateness, as if you cannot do without them, but eventually you would free yourself from the burden of debts. Plastic money seems to be a viable solution for most of our needs, despite of cash rotting in our bank accounts, but considering the fact of high interest rates on credit cards, it is wiser to save them for only dire emergencies. Eliminating the temptation of plastic money is crucial, unless you wish to continue the vicious cycle of “debt-full” life. Take out your scissors and engage in the card-cutting ceremony, after you have narrowed down your choice(s) of maintain credit cards.

Banks disregard all the loan applications coming from consumers who possess several credit card accounts, even if they are sitting idle. The reason being, that you may suddenly charge all of your available plastic money, and extending another credit card to you would be a big risk for the bank. Not to forget the temptation you have to charge more from the credits than your budget allows.

Paying off your credit is not enough; you need to write to the bank or the Credit Card Company to inform them of your wish to close the account. Ensure that they revert with a confirmation in writing for the same.

To begin paying off the credit cards, you should begin with the smaller balances first, since they are easier to get rid of and it will offer you an opportunity to monitor your progress and build back your confidence. Upon completing the lesser debts, move forward to conquer the fort. Now that you have the ability to manage a revolving balance in a responsible manner, inquire your lending institution if you qualify for a lower rate of interest. You may want to visit other banking solutions or Internet for obtaining better options on the interest rates and inform the same to your existing lender. This tactic will certainly win you a bargained deal, i.e., lower interest rates to pay off your debts.

Another unique way to reduce your rate of interest is the idea of transferring existing balances via zero balance transfer credit cards. A new card you applied for may only be offering special rate for balance transfers, but it will save you tremendously, eventually and you pay-off the remaining debt is much lesser time than anticipated. However, you must read the fine print because the offer usually expires post a certain number of months, and the rate of interest climbs up, once again. If you keep a watchful eye you may be able to obtain similar offers from other banks and switch the remaining balance to them, yet again! Nonetheless, it is a good idea to persuade your existing bank to maintain your business, because an increased period of time will indicate longer frequency of lower rates.

Acquiring a consolidation loan is yet another efficient way to get rid of your multiple credit card debts, provided you qualify for the loan. A debt consolidation loan permits you to pay all your outstanding credit card debts in a single shot. The best part is that you worry less as you have only a single form of debt to pay as monthly installment, if you obtain consolidation loan. Furthermore, this loan offers a much lower interest rate as compared to credit card payments. Subsequently, you save plenty and can invest your money in profitable returns.

Debt Agreement with your creditors is a feasible option for those in financial difficulty. You can negotiate a payment compromise that enables you to control your monthly payments. It is the last resort when all the above-mentioned options fail, and you face an extreme crisis situation like personal bankruptcy. If your credit card company agrees to the Debt Agreement, some form of agreement that might take place are:

  • Payment of lesser than the full amount of a few or all of your debts;
  • A cessation on payments for certain number of months to allow you save funds to make the whole payment in a single shot;
  • Transfer of property from the debtor to the creditor as full or partial payment of debts;
  • Deduction of payments directly from your income/salary

Use any of these unique ways to get out of debt, today!

All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.

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