In today’s society, it is easy to get caught up in a whirl-wind of credit card debt. According to NerdWallet “The average U.S. household with debt carries $15,762 in credit card debt and $130,922 in total debt.”
Often, people are bombarded with high interest rates and stuck paying minimum payments, leading to a lifelong nightmare of debt repayment and thousands of dollars lost in interest fees.”
Reduce the burden of your debt fast and efficiently by following these steps:
- Try to increase the amount you contribute to monthly payments. I know it’s easier said than done, but if you can commit to an additional source of income just for 3, 6, or 12 months to make more substantial payments, the debt will disappear in
- Prioritize repayment of high interest rate cards first. You may only be able to afford to make minimum payments on the majority of your cards, but pay larger installments on cards with higher interest rates to get rid of these expensive accruing debts first. Work from one card to the next, in order of descending interest rates.
- Find a way to lower your interest rate. Interest is wasted money in every aspect and that is simply how the credit cards get you under their control in the first place. You agreed to borrow money and then agreed to pay back more than you initially borrowed. Many credit card companies participate in something called balance transfers, which can significantly reduce or get rid of your interest rates.
A Little About Balance Transfers
A balance transfer is when you consolidate and transfer various types of debt onto a special offer credit card, usually a 0% APR introductory offer.. While some of them do charge a one-time balance transfer fee, if you do your research there are some with no fees at all. This simplifies your ability to keep track of all of your payments at once, avoiding late fees, and most of all eliminating wasted money on interest.
Controversies Associated with Balance Transfers
The most common mistake when making a balance transfer to a 0% interest credit card is thinking that you can spend more money that you still don’t have on those credit cards. With a new outlook and chance to finally get a hold of your debts, avoid falling into the same bad habits again. You can likely transfer debts between $5,000 to $15,000 with 0% interest.
When you transfer your balance there may be a small one-time fee, which usually averages around 3%. While this may have you thinking “Oh, that’s how they get you” it is almost always more cost effective than paying your current interest rates. You can use our convenient balance transfer calculator to see if it makes sense for your situation.
http://www.eliminateinterestfees.com/calculator/
Applying for any new credit card will lower your credit score by just a few points. It is best to take care of your balance transfer before applying for any additional loans anyways, such as an auto loan or mortgage. It can take anywhere from 3 to 6 months for the points to be returned to your credit score.
Balance transfers should be strategically arranged to get you out of debt fast and interest fee. It is important to avoid late penalties because the 0% promotion may be lost in the process. Once all of your debt is in one place, it is easy to set up a monthly automatic payment before the due date to never miss a payment.