What to Do If One Credit Card Has Very High Interest?
Carrying a balance on a credit card with a very high interest rate is expensive. For example, a balance of $5,000 on a credit card with a 24 percent annual percentage rate costs $100 in interest every month.
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Timeframe
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Pay off a credit card with a high interest rate as soon as you can by making payments higher than the minimum payment, suggests Bankrate.com. After paying the interest each month, anything more goes directly toward paying off the debt.
Balance Transfer
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Transfer the balance to a card with a lower interest rate if possible. Some credit cards offer low introductory interest rates that give the cardholder a chance to avoid paying interest by paying off the balance before the introductory period ends. Because most cards charge a balance transfer fee of 3 to 5 percent, make sure the interest rate savings is enough to make the fee worth it, according to MSN Money.
Lower Rate
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Some credit card companies may be willing to lower the interest rate on a credit card, especially for good customers who pay their bills on time, according to Bankrate.com. The company may be even more likely to lower the rate if the customer mentions plans to transfer the balance to another card.
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