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:
- Balance Transfer Options
- 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:
- Introductory periods with zero percent interest rates
- Lower interest rates than are currently being paid
- 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.
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