Sunday, April 28, 2013

Best Way To Solve Those High Interest Rates On Credit Cards

Credit card debt is one of the things that are troubling the average American today. With over $849B of credit card payables, this ranks as the third highest debt in the country. The thing that makes it very difficult to get out of is the interest rate that you have to pay off on top of what you actually owe. It is one of the highest rates in the industry. And besides that, you also have to pay for finance charges and if you are late for even just one day, over $30 of late penalty fees.

The best way to solve your high interest rate on credit cards is to stop using your cards. If you got yourself in so much financial debt because of your cards, you need to stop purchasing items through them. At least until you learn how to discipline yourself about their use. That is the fastest way to not be bothered by the interest rates - stop acquiring more debt.

To make this possible, you need to start living within your means so the cash that you receive is enough for all your expenses. You can accomplish this by setting up a budget that clearly defines how much your income is every month and the various expenses that should be prioritized.

Even if you are working with the best debt relief program, if you do not stop acquiring debts, you will find it hard to reach your goal of debt freedom. Work on your budget first before you focus your eyes on the debts that you currently have.

The budget that you will create will help you identify how much you can afford to send towards your debt payments. This is very important in choosing the program that will get you out of your credit problems.

As you define all of these and you understand how your budget should be used to pay off your obligations, you can turn your eyes towards your debt payments.

One of the first things that you should do to deal with the high interest on your cards is to call your creditor. If you are finding it hard to pay it off, you should call them to ask how you can lower your interest rate. Tell them of your sincere intentions of settling what you owe but under the present circumstances, you can no longer meet the payment requirements. You may be surprised at how amicable they can be if they see your sincerity.

If that does not produce desired results, you can opt for debt consolidation loan as a way out of your credit card debt. One of the benefits of this debt solution is the reduction of your interest rate - at least if you do it correctly. If you are able to borrow a low interest loan through your good credit score or a collateral, then you can say goodbye to your interest rate problems. Just make sure you stay away from bad credit loans as these have high interest rates.

Another option is balance transfer cards. For a certain fee, you can transfer your high interest credit card debt to a new one that has a zero interest introductory promo. That will give you at least 6 months of no interest so you can make more significant payments towards your credit card balance.

These are only a few of the options that you have to help with your high interest card debt without putting too much negative effect on your credit score. Before you decide, know your options and learn from your mistakes. Start making the right choices towards your finances to keep yourself out of any kind of debt.

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