If you're struggling with credit card debt, finding ways to reduce the interest on your debt can provide much-needed financial relief. Depending on how much debt you are carrying, you could end up saving hundreds or even thousands of dollars in interest payments.
Contact the Issuer
If you're being deluged by offers from other credit card issuers, you might be able to get a lower credit card rate simply by calling your current card issuer and asking for a rate reduction. Inform the customer service representative that you've found another card with a lower rate and you're considering transferring your outstanding balance. If the representative can't help you, ask to speak to a supervisor. If you've been a loyal customer and have always paid your bill on time, the issuer may be more willing to cooperate. You have nothing to lose by asking.
Make the Switch
If you can't get anywhere with your credit card company, consider taking advantage of the offers you were using as negotiating leverage, assuming they really are more attractive. Examine the offer thoroughly, especially the fine print. You may have received an introductory teaser rate that jumps significantly after six months or so. However, you can still use this feature to your advantage by paying down as much of your outstanding balance as possible during the introductory period. Also, be on the lookout for any associated transfer fees the offer might contain.
Attacking Multiple Debt
Suppose you have multiple credit cards with outstanding balances. To limit the overall interest you pay, pay as much as you can each month toward the card with the highest interest rate while paying only the minimum balance due on the rest. When that first card is finally paid off, focus your efforts on the card with the next highest rate, and so on. By implement this "debt avalanche" approach, you'll reduce the total amount of interest you pay over the long haul.
Use Your Home
If you've owned your home for several years, you may be able to borrow against its accumulated equity in the form of a home equity loan or home equity line of credit. You'll likely receive a lower interest rate than offered by your credit cards, and you can use the money to pay off your credit card balances. Don't fall behind on the loan payments, as the bank could take your home if you do.
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