How To Lower Credit Card Debt

Not long ago I posted an article on how to eliminate credit card debt. While eliminating credit card debt was my ultimate goal (because, well, I had more than five cards open (not including my husband’s), perhaps other people wish to only lower credit card debt. Lowering credit card debt is important, not only because of the interest and payments that can pile up, but because too much debt negatively affects your credit score. When your credit score lowers, lenders can raise mortgage or car loan rates.
There are sometimes clauses in your mortgage or car loan agreements which allow the lenders to run your credit report at certain times. If your credit score is lowered, they can up your interest rates (they can lower them too, but hey, that’s about as likely as health insurance companies lowering premiums). If that isn’t incentive to keep an active eye on your credit reports, credit card debt and debt to income ratio, I don’t know what is.

Lowering credit card debt isn’t difficult. There are several ways to do it, some expensive, some cheap and some free. Consolidation services are perhaps the most expensive, although not overly so if you go with a not for profit organization. Keep in mind that not for profit does not mean inexpensive in every case! Check what the charges are before you engage in the contract. Oftentimes there is a buried paragraph in the contract which states that you will make one whole monthly payment as a “voluntary” contribution to the company. That’s sort of like baking a hundred cupcakes for a church bake sale only to learn a ten of them are going directly into the mouth of the organist, for free! Request a total amount of fees be stated up front and that you are not making any “voluntary” extra payments (or involuntary, for that matter).

It’s not necessary to lower credit card debt using a consolidation firm. You can negotiate terms with credit card lenders on your own. Simply call the lender and request a lower interest rate. It’s not always fruitful, but neither is opening oysters for pearls. You’d still open one if you the opportunity presented itself, right? Present your own opportunity, call your credit card lender and ask for better terms.

Lastly, there is a great way to lower credit card debt with no cost, it’s what is called a rolling credit card pay off. Make the minimum payment on all your credit cards except one, the highest interest/balance card. On that card make the minimum payment plus any extra you can afford (say $100). So now you’re making around $143 payments to the card (remember, you’re including the minimum). When that one is paid off you carry that $143 over to the next card plus that minimum payment. The next card would get a payment of $173 every month, for example, until it was paid off. Never reduce the amount of the payment, even if the minimum goes down. You’ll eventually have all your cards paid off (close them out if they have low limits by the way!), giving your credit score a boost and allowing you to refinance your home and car at lower rates.

Similar Content:

1. Credit Card Debt Consolidation Companies About ten years ago, I started collecting credit cards like they were valuable stamps. It didn’t take long to get...
2. How Can YOU Eliminate Credit Card Debt? Sometimes I feel as though my body is hardwired to accept any and all credit card offers I find in...
3. Does Online Credit Card Debt Consolidation Exist? Online credit card debt consolidation does exist but there are a lot of pitfalls involved in this kind of debt....
4. Consolidate Debt Service Explained In the days where I worked for Wells Fargo I had a long hard look at debt consolidation services. Debt...
5. Please Don’t Use Debt Consolidation Loans For Bad Credit Debt consolidation for people with bad credit can be a really bad idea. If the amount of the loans can...