|
|
 |
Debt consolidation – Options for Reducing Credit Card Costs
Americans are using credit cards more than at any time in
history, and credit card companies are reaping record profits. One of the
reasons that the credit card industry is so profitable is that so many of us
use our credit cards unwisely.
If you have good credit, you can get a credit card with a reasonable interest
rate; say 10% or so. You can keep that rate by paying your bill on time. On the
other hand, if you pay your bills late or fail to pay in full, then you will
have to pay late fees and interest. Late fees often range between $15 and $29;
some card issuers may charge even more. Adding to the pain of paying late fees,
however, is the likely change in interest rates on your card if you pay late. A
late payment may trigger a substantial increase in the interest rate on your
card, and that “reasonable” interest rate of 10% may suddenly rise to 20% or even
25%!
It’s hard to pay off your credit card balance when you have late fees and 25%
interest, so this is something you definitely want to avoid. If you usually pay
on time, and you pay late once and are charged a late fee, ask your credit
company if they will waive the fee. They will often do it – once. Some will not
do it at all, but it is always worth taking the time to ask. If they are
unwilling to help you, then you may be better off shopping around for a better
credit card deal elsewhere.
You can often save money by transferring your balance to a lower interest
credit card, if you have one. Competition has been fierce during the last few
years among credit card companies, and it is fairly common to receive
“promotional” rates of less than 5% if you transfer your balance to another
card. Be sure to read the fine print, however. Those low rates usually apply
only to transferred balances, and not to new charges placed on the card. There
is usually a time limit associated with the promotional rate, and higher rates
may apply at the end of the time limit, perhaps even retroactively!
In summary, if you want to minimize your credit card costs, try the following:
Shop around for a
credit card with a low interest rate.
Pay your bills on time.
A good way to do this is to pay online. That way, you won’t have to worry about
your check being delayed in the mail.
Transfer balances from
high interest rate cards to cards with lower rates.
Use your cards wisely. If you can pay cash,
do it.
A few simple steps can save you a fortune in interest charges and late fees.
©Copyright
2005 by Retro Marketing. Charles Essmeier is the owner of Retro Marketing, a
firm devoted to informational Websites, including End-Your-Debt.com
To Buy Or Not To Buy A Home With A Reverse Mortgage
Home Equity Loan – A Reverse Mortgage
10 Pointers on College Loan Consolidation
Compare Mortgage Rates and Negotiate!
Credit Card Debt Freedom is Possible
|
|
