What To Do If Your Credit Card APR Is Too High
Paying down your credit debt can be hard when you have to deal with a high APR interest rate. Any interest you pay increases your monthly payment while making it harder to pay down your principal balance. Finding ways to lower the amount of interest you pay will be to your advantage. What options are available to those looking to lower their credit card interest rate?
Ask Your Credit Card Company To Waive Interest Payments
Take a bold step by asking your creditors to waive the interest associated with your credit card temporarily. They may be willing to do so if your interest charges are making it impossible to make a timely payment. Attempting to get your interest charges waived without having to use a credit counseling service is better for your credit.
Credit card companies are willing to waive the charges because they want to keep you as a good customer. Keeping you as a customer ensures they have a steady stream of revenue coming in. It is impossible to keep a customer if that customer is not satisfied. Credit card companies are just as worried about customer services as any other industry is.
Most people don’t use this option because they are afraid of having the request denied. Don’t let fear stop you from taking a step toward debt relief.
Shop Around For A New Credit Card
Consider transferring your balance to a credit card with friendlier terms. Borrowers with good credit scores may be able to find credit cards with zero percent interest for the first 12 months if not more. However, you may be able to find a line of credit that comes with a lower interest rate.
A balance transfer offer allows a borrower to essentially change the terms of their credit contract. This means you could get relief from more than just your interest rate. Annual fees, late payment fees and other fees you were paying on an old credit card may not exist on your new card.
For example, let’s say you owe $15,000 on your credit card with an interest rate of 20 percent. Each year you are paying $3,000 in interest alone. Your annual fee would then add another $100 or so each year to use the card. Average late payments fees are $35.
Paying late each month would mean you pay $285 just in interest and late fees. Consider that you also have to pay as much as 5 percent of your principal balance each month just to satisfy the monthly minimum. In this case, you would pay an additional $750.
Switching to a card with no late fees would alone save you $400 a year. Assuming that card carries a 5 percent interest rate, you would only pay $62.50 a month in interest. That is a savings of almost $2,400 a year. Applying your total savings of $2,800 a year to your principal balance can have you out of debt within five years.
Make A Debt Settlement Offer To Get Credit Card Debt Relief
That principal balance of $15,000 can be reduced as well. When you start to miss your regular payments and are facing bankruptcy, creditors will usually be willing to take half of what you owe as a way to settle the debt. This means you could wipe out $15,000 worth of unsecured credit card debt for as little as $7,500 legally without bankruptcy.
Reducing your debt in that manner would save you from a high APR with penalty fees, high interest charges and suffocating monthly payments. You can negotiate and make a settlement offer regardless of your credit score. Anyone with excellent, average or even bad credit can take advantage of debt settlement for debt relief.
You can use a debt relief service to deal with your creditors if you would like. You should remember that this will negatively impact your credit on a short term basis. Most lenders equate debt settlements with filing for bankruptcy. However, having bad credit should be a minor concern when you can legally reduce your credit card debt by 50% or more without filing bankruptcy.
Paying too much high interest on a credit card can make it hard for you to get out of debt. Take actions now to ensure you are not mired in credit card debt for the rest of your life. The best way to avoid interest is to pay your balance in full before the end of each billing cycle. Get more information on credit card debt solutions call us to speak with someone about your credit card issues right now.