How to Eliminate Credit Card Debt: Getting a Low Interest Credit Balance Transfer Helps Debt Reduction
According to the Federal Reserve Bulletin, almost 50% of Americans have credit card balances. Unfortunately many credit cards have high interest rates making them difficult to pay off quickly as their balance continues to grow. To eliminate credit card debt fast, consumers can refinance interest rates or make a credit card balance transfer.
Refinance Interest Rates
Consumers can refinance interest rates on their credit cards simply by phoning their bank or credit card companies and asking for a lower interest rate. In addition, many credit card companies offer a series of credit cards each featuring a different interest rate, varying annual fees, and credit card rewards.
Credit Balance Transfers
Lowest Interest Rates – Transferring the balance from a high interest credit card to a low interest credit card can save money on the total interest paid, providing that there is sufficient credit on the low interest credit card. Call the credit card company that has the lowest interest rate and ask them to make the credit card balance transfer from the higher interest credit card.
0 Interest Balance Transfer – When transferring a balance to a credit card that offers zero interest, don’t make any new purchases. Apart from accumulating more debt, the new purchases may be charged at a much higher interest rate until the transferred amount has been paid off. Wait until the cheap debt has been paid off before making new purchases.
Low Interest Credit Cards
- Credit Card Promotions – Read the fine print of any interest free credit card promotion or low interest credit card application sent in the mail. Usually there is a low interest rate that entices the consumer to transfer their credit card balances from higher interest rate cards. Be aware of the interest rate since it may drastically increase after a short introductory period.
- Zero Interest Credit Cards – These credit cards are great if the consumer is expecting to transfer a balance from their high interest credit card to the zero interest credit card. The credit card companies are counting on the consumer using the card for new purchases.
- Credit Card Rewards – Credit cards with frequent flyer miles, points or cash back incentives can also equate to higher annual fees and definitely higher interest rates. Cardholders need to calculate if the air miles or points received actually pay for themselves considering interest and fees paid over a yearly basis.
Unfortunately some people are still not able to eliminate their credit card debt on their own and must involve a third party. Although bankruptcy should be the last option, credit card debt settlement is also available. Debt settlement is the alternative when a defaulting credit card holder negotiates with the lender for an agreed reduced balance to be paid.