One of the major reasons why consumers get buried by their credit card balances is the high monthly payment. Most credit card users find it difficult to cope with their payment schedules especially if they have more than two credit cards. If you want to learn how to eliminate debt from your credit cards, you must identify the factors causing the high payment. Some of these factors include late payment charges, over-limit fees and high interest rate.
If you want lower credit card payments, here are some guidelines that you should consider.
Request for a lower interest rate – It is possible to talk to your credit card provider and request them to lower the interest rate imposed in your account. When you have low interest rate, your monthly payment will also be lower. This approach is advantageous because low interest rate means that big percentage of your payment will go to the principal amount, and so your debts will be eliminated faster.
Although this option is really effective, not everyone will be able to enjoy low interest rate unless they have a very good or excellent credit score. In case, you are already enjoying the best interest rate given by your credit card provider, you may not be able to request for a lower rate.
Consolidate your balances – If you have several credit card balances, you may choose an account with the lowest interest rate and transfer charges where you can put your other balances. But be very keen about the interest rate, ask if it is permanent or not. Once your balances are consolidated into just one credit then your monthly payment is significantly lower compared to paying several accounts with varying interest rates. You may also avail of a consolidation loan to pay your balances all at once. However, you must have a good credit score to qualify for a loan. Before you use this approach, see to it that you fully understand the process because any slight mistake can lead to potential financial trouble.
Hire debt management agency that can help you lower your monthly payment – Admit it, negotiating or simply asking your creditors to lower your interest rate is challenging, so a professional assistance will be highly beneficial. Of course, getting their services will cost you but the savings you can get from your lowered monthly payments are all worthwhile.
If you opt for this method, make sure to select the right company. Do not deal with an agency that asks for high service fees and upfront payments. Knowing how to eliminate debt legally is what every borrower aspires, so analyze your situation and choose the method that is right for you.