Credit card debt in this country is astronomical. Many people are carrying balances on high interest credit cards and very high interest rate department store cards. High interest can add large amounts to that balance every month and getting out from under this kind of debt can sometimes seem impossible.
No-one wants to pay more interest on their credit cards than they need to and there are some strategies that can help you get out of debt much quicker by moving your debt around a little.
Follow these simple recommendations in order to regain good credit score:
Get a Zero Percent Card
Ironically, the first step in this strategy is to start shopping. This won't cost you a penny though. This shopping is for a zero percent credit card. There are actually a lot of credit card companies now offering such a card.
These cards can be a little misleading because the zero percent they offer is a temporary introductory interest rate. If you check the details of the offer you will discover than the regular interest rate kicks in somewhere down the road. Most of these zero percent cards ask you to transfer the balance of another card to this one at zero percent interest (for the introductory period). After that time, you will begin to pay regular interest on any balance you are still carrying. But you can compare credit cards and apply for one that suits you better.
These zero percent cards also charge regular interest rates on any new purchases. You will find that the zero interest only applies to the initial balance transfer and when you make payments on this card they are applied to that balance transfer first. Only when that is paid off will your payments begin to touch the new charges which have been accruing interest at the regular rate.
So, your first step is to find a zero interest rate credit card that you can use for a balance transfer. Look for a card with the longest possible introductory period for this zero rate.
Apply for a Low Interest Card
Once you have found the best zero interest rate credit card, you must do some more shopping. Now you are looking for a second credit card. This one should be a low interest rate card. Check your credit eligibility to apply for the best regular rate card you can find.
Transfer Your Balance
Now what you do is transfer all your high interest credit card and department store debt to the new zero interest rate card. In this case balance transfer is the best possible solution.
Start making payments on this debt and pay off as much as you realistically can before the end of the zero interest rate period.
Absolutely do not use this card for any new purchases. Simply leave your debt on it and pay as much off as you can and keep at it monthly.
One More Balance Transfer
Now, use the second new card (the low regular rate one) for any new purchases or expenses. Make sure you are not maxing out this card and are using it responsibly. The whole idea here is to get you out of debt, not make any more. Which is more do not forget about getting a good credit report from a credit bureau after all!
If you still have debt on the first new card after the initial zero percent period is over, you may be able to obtain another zero percent card and transfer the remainder of your debt to it and keep paying it down while not incurring any new interest.
This strategy can be a great method for reducing your debt without adding additional financing charges to.
It is essential that you do not keep charging and overspending once you start this program. Debt reduction can be an incredibly liberating activity and you should take advantage of zero interest to achieve this goal.
It is also very important to cut up and cancel any credit cards you replace with these newer low interest ones.
|
