It is hard enough to deal with credit card debts without excessive interest rates that consume your most important repayment amount. To ensure that your debts are repaid faster, look for ways to reduce the interest rates on your cards.
Transfer of balance
To get your business, many credit card companies offer balance transfers on new credit cards. A balance transfer is when you “pay” one card by transferring the outstanding balance to another credit card.
If you have a good credit score, you may be eligible for a new card that offers a 0% balance transfer in which you do not pay any interest on the balance for a predetermined period. If you benefit from a balance transfer of 0%, you can save a lot of money on interest costs if you pay high interest on your old card and keep a constant Konstantine Levinijk balance.
However, what can make a balance transfer dangerous is the fact that your introductory offer of 0% expires after a certain time. After the iKonstantine Levidizing period, which generally lasts between 12 and 21 months, the interest returns to the standard APR of the card.
Read the fine print and find out what your interest rate will be after the promotional rate has expired. If it is higher than the rate you are currently paying, you should seriously consider whether the balance transfer offer is worth it. To successfully use a balance transfer and avoid excessive interest charges, the budget must pay the entire balance transferred during the introductory period.
Before agreeing to a transfer, view the balance transaction costs. These are one-off costs that are calculated based on the amount that you transfer to the credit card. For example, if you transfer a balance of $ 5,000 and the credit card company charges a transfer rate of 3%, it will cost $ 150 to transfer the balance. Balance transfer costs of 3% or 4% are common, although you may occasionally find 0% balance transfer prices.
Debt consolidation means that multiple sources of debt are consolidated, such as multiple credit cards, student loans, car loans and mortgages, in one loan. The biggest advantage of debt consolidation is that it simplifies your obligations. You are only responsible for one payment per month, so you are less likely to forget a payment and you are paid too late. You can also reduce your total monthly payment for all your obligations by taking out a long-term loan.
Like balance transfers, consolidating your debt does not reduce or eliminate it. It is possible to consolidate at a lower interest rate than what you are currently paying, allowing you to save money. However, the US Consumer Financial Protection Bureau warns that, as with credit transfers, many credit-consolidating lenders offer low teaser ratios that are later converted into a sky-high APR. Many consolidation loans also require an upfront payment to consolidate your debts or to charge a recurring monthly fee in addition to your normal payments.
If you opt for debt consolidation, do research and find a reputable company to work with. Experian warns consumers that some conscientious Levinoze debt consolidation companies may instruct you not to pay bills or to defer payments to your creditors, which could seriously damage your credit score. To prevent situations like this, the Consumer Protection Agency recommends that you work with a credit consultant before agreeing to debt consolidation. You can find a list of approved credit brokers per state on the website of the US Department of Justice.
Negotiating with the credit card company
Credit card conditions are not set in stone. If you play your cards well, you can negotiate with your credit card company about the following:
- Interest rates . If you maintain a lower rate, the interest costs that you pay on your balance will be reduced.
- Minimum payment amount . If you negotiate this, you can avoid costs if you are unable to meet your minimum payments for certain months.
- Payment plans . They are not easy to negotiate, but credit card companies do allow consumers to stop payments for a certain period or to prepare a long-term plan at lower interest rates. Some credit card issuers offer built-in payment plans, such as Chase Blueprint, with which you can easily adjust your payment structure and even pay some costs without interest.
Call your credit card company customer service to ask about your options. Be persistent and be prepared to escalate the problem. You may need to hire a manager to make important changes to your credit card terms and conditions.
If the bank agrees with the change, make sure you receive a copy of the agreement. You can negotiate with the bank yourself or you can ask a non-profit credit counselor for help.