Low Interest Rates With Balance Transfer

Most Americans today have some type of credit card debt, and the amount owed on average goes up every year. Unfortunately, many individuals find that the amount they owe on credit cards is much higher than it should be with a certain level of income in play. With the lingering effects of the Great Recession still on the minds of many, it makes sense to investigate different options to reduce interest rates for items like credit cards, mortgages, and traditional loans.

Historically Low Interest Rates To Take Advantage Of

Central Banks around the world are providing lots of liquidity and lowering their interest rates. If corporations, banks and businesses can take advantage of these low interest rates, so can you. Right now is the best time to sign up for balance transfers. The lower the term the better. They can only go up from here.

The most common way to save money on a credit card bill will be through one of two ways:

  1. Balance Transfer Options
  2. Negotiating a Lower Interest Rates

Sign Up For A Balance Transfer

A balance transfer option is often the simplest method for reducing credit card bills and the overall amount paid. The credit card company that would be accepting the balance transfer would be making more money from cardholders having a higher card balance.

One caveat to finding a favorable balance transfer option is being able to pay credit cards on time for at least six months to a year is often a prerequisite for being able to transfer successfully funds to a card with a lower interest rate or a favorable introductory period.

Negotiate The Lower Rates

Another method for lowing credit card interest rates and overall payment requirements stems from calling up the credit card company to request a lower interest rate. This isn’t as hard as most people would think, and the process requires nothing more complex than a single phone call and a request for the lower rate.

Credit card companies get requests from customers to reduce interest rates on a frequent basis, and so most have a straightforward and official way to submit applications.

Things to look for when looking at a balance transfer option include:

  1. Introductory periods with zero percent interest rates
  2. Lower interest rates than are currently being paid
  3. Potential credit limit increases due to balance transfer activity

Whether a person decides to save money by transferring a balance or whether they feel a request for a lower interest rate might be a better idea, the amount of interest paid might be lower by anywhere from 5% to 15%. For individuals with significant balances on their credit cards, this could represent hundreds of dollars saved each year on money that would otherwise be paid solely to interest charges.

For example, if a person carried a balance of about $6000 and was burdened with a rate near 30%, his minimum monthly payments could top $170 a month. If that interest rate was lowered to something around 15%, those minimum monthly payments could drop as much as $50 every month, which means that paying that card off sooner would be possible.

Before attempting a balance transfer or trying to get a lower interest rate, it’s a good idea to pay credit cards on time and anything else on time that might impact a credit score. Each month of on-time payments makes it easier to get a substantial reduction on an interest rate.

Areas To Save Money

Everyone wishes that they had more money in their bank account. The good news is that you can take steps to ensure that your bank balance is a little higher this year. For those who want more money in their wallet, here are some good ways to stop spending so much of your hard earned cash.

You Won’t Need To Borrow Money If You Can Save Money

Save Money On Your Taxes

There are a lot of options available to those who want to cut down on their tax bill. If you are a business owner, you can write off most of your business expenses. Even minor bills such as pens and paper can be written off. Additionally, there are credits available for those with children or who make less than $13,000 a year. Putting money into an IRA or other eligible retirement accounts can reduce your tax burden by hundreds or thousands of dollars each year.

Pay Cash Instead Of Taking Out A Loan

  • Whenever possible, pay cash for a large purchase instead of taking out a loan. This helps you save money because you don’t have to pay interest in addition to the cost of the purchase.
  • For example, if you purchased a $10,000 car with cash, you will only pay $10,000. However, if you pay for that car over 60 months at 5 percent interest, you will pay nearly $1,300 more for the car.
  • Additionally, when you pay with cash, you have an asset that you own outright. For those who are currently in debt, a debt consolidation can lower the interest rate that you are currently paying on your debt. That can help you save a significant amount each month.

Reduce Money Spent On Utilities

  • You can reduce your electric bill each month just by unplugging lamps and electronic devices when you are not using them. Turning off the lights when no one is in a room is another way to save on electric bills.
  • Keeping the water bill to a minimum is as easy as taking shorter showers, reducing the amount of laundry done in a day and by making sure that there are no leaking or dripping faucets.
  • Installing energy efficient windows can help reduce your heating and cooling bills. Another way to cut back on heating and cooling costs is to keep the thermostat at a lower temperature when no one is in the house.

When it comes to your money, you want to keep as much of it as possible. Fortunately, there are many different ways that you can reduce expenses throughout the year. If you are willing to look over your taxes again, pay cash instead of taking out a loan and turn the lights off when no one is in the room, you can save hundreds or thousands of dollars a year.

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