In these trying economic times, many of us are finally coming to realize the importance of getting out of debt, especially high interest credit card debt. Unfortunately for many of us, the current economic conditions are making this task even more difficult for most debtors carrying high balances.
To make matters worse, many people are being faced with falling income or even unemployment. Families are being forced to scrape by and are forced to focus on getting by month to month, even if it means making decisions that make little financial sense for them in the long run. How can anyone make progress and get out of debt in these tough times?
One way to help ease the financial burden of high interest debt in both the short and long term is to get a lower interest rate. Reducing interest on credit cards usually means a lower monthly payment, which could give you the breathing room you need if your budget is tight. By avoiding late fees and over limit fees and getting a lower interest rate, you could potentially see big monthly savings.
Just as importantly, a lower interest rate means more of your money actually reduced the debt you owe (the principal) every month, rather than going straight to the credit card companies profits in the form of finance charges. This means that you will be able to get out of debt much faster. Unfortunately, getting a lower interest rate on credit cards is easier said than done. Still, most people do have options available to get their rates reduced.
If you do not have good credit, and especially if you are or have recently been behind or over the limit on your accounts, it is unlikely that your creditors will give you a lower interest rate directly. However, an accredited credit counselor could help you get lower rates and payments through a debt management plan.
If your credit is very good and you have no trouble paying your bills, but your interest rates are still high, there is a good chance that you could get a lower rate by simply asking for one. Simply call your credit card companies up and request a reduction in interest. Your creditors will then review your account and, if you are eligible, they will drop your interest rate.
Another option for those with good credit is to play the balance transfer game. If you have a very good credit history, credit card companies will likely be very eager to get your business and are willing to entice you by offering great balance transfer rates. If you choose this options, be sure to keep an eye out for balance transfer fees, tricky repayment terms, and make sure you know how long the special rate will last and what it will be if and when it expires.
If your creditors will not reduce your high interest rates and you cannot lower them through balance transfers, speaking to an accredited counselor may be your best option. A trustworthy counselor could help you discover your best options and, if needed, help you obtain lower rates and payments through a debt management plan.