If your credit card debt is overwhelming, one way to make your debt more manageable is by paying less in interest and more into your principal balance. Even if you don’t have a substantial amount of charges on your credit card, paying less in interest charges can bring you closer to being debt-free. Some of the following are ways you can potentially pay less in credit card interest:
Don’t miss payment due dates
If you don’t want to see your interest rate skyrocket, it’s important to be timely with your payments. Read the fine print of your credit card’s terms and conditions, and you’ll likely find something that gives your credit card issuer the right to increase your interest if you miss a payment, or if you’re late. You’ll usually need to be substantially late in order for this to go into effect, but whether you don’t have the money to make your payments or you simply forget, you don’t want to let this happen.
Pay more than the minimum
If all you’re able to afford is the minimum payment, it beats defaulting altogether. But make every effort to pay more than the minimum each month if you’re looking to pay less in credit card interest. When you only make minimum payments every month, you’ll mostly be paying into the interest only, especially if your rate is high. It can take many minimum payments before you even begin to make a dent in your principal, especially if you keep charging on the credit card. When you only make minimum payments, you end up paying a lot more in interest fees over time.
Explore other credit card options
There are plenty of credit card programs out there that provide low interest rates, or even zero percent interest, for a limited time. Many of these introductory offers are reserved for those with good credit, so you may not qualify if you’re still working on your credit score. However, even if you don’t currently qualify for some of the better credit card offers, it still doesn’t mean you necessarily have to settle for the worst. If your only credit has a very high interest rate—a department store credit card, perhaps—you may want to begin looking for its replacement. If high-interest credit cards are all you qualify for at the moment, you may want to look into a secured credit card, which may offer a more favorable rate.
You’ve got nothing to lose by calling up your credit card issuer and trying to negotiate a better interest rate. If you’re having difficulties paying down your debt because of all the interest you’re paying, explain that. And if you’ve recently gone through something that has put a strain on your finances, be sure to let your credit card issuer know and ask what your options are. You can also mention that you’ve been considering other credit card offers because you need a lower interest rate. If you’ve been a customer for a while and you’ve been timely with your payments, they may be willing to work with you.
Work on improving your credit
If you can’t get the interest rate lowered on your current credit card, and you don’t qualify for credit cards with lower interest rates, work on improving your credit. By eliminating debt and bringing your score up, you may eventually be eligible for credit cards that offer more favorable rates.
Do you need extra cash to eliminate debt and catch up on bills? If you’re receiving structured settlement payments, Peachtree Financial Solutions may be able to help. Contact Peachtree today to find out how you can sell future annuity payments and receive cash in a lump sum.
Nothing above is meant to provide financial, tax, or legal advice. You should meet with appropriate professionals for such services.