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Debt consolidation – Options for Reducing
Credit Card Costs
by Charles Essmeier
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,
a site devoted to debt consolidation and credit counseling, and
HomeEquityHelp.net, a site devoted to information regarding home equity loans.
This article is reprinted with permission from www.WritingCareer.com |
