How to Combat High Credit Card Interest Rates

During tough economic times, consumers search for ways to save money. One area that many consumers evaluate is credit card spending and their credit card interest rates. In doing so, consumers can combat the effects of high credit card interest rates.

Instructions

1. There is no reason to stay with a high interest rate credit card. Look for credit cards that offer lower interest rates and transfer the balance to the credit card with the lower rate.

2. 

   If you don't want to go through applying for another credit card and would prefer to lower your current interest rate, send a letter or call your credit card company requesting a lower rate. Let them know that you have other offers and will transfer your balance if they fail to honor your request. Credit card companies don't want to lose longtime customers with good payment history. Once they agree to lower the rate, get the confirmation in writing.

3. Pay more than the minimum due. Paying more than the minimum monthly payment on your credit card will reduce the principal balance quicker. The lower the principal balance, the less interest will accrue.

4. Don't allow your credit card balance to accumulate. One way to avoid the high interest rate charge is to pay off all of your outstanding charges at the end of each month. If you don't carry a balance, you don't incur interest charges.

5. 

   Use a debit card rather than a credit card. You can open and fund a bank account to use just for debit card purchases. Using a debit card is the equivalent of using cash. You don't incur high interest finance charges and you won't have to worry about a credit card bill each month.

Resources

• Lowering Credit Card Interest Rates