| How to Manage Your Debt, Part 4 |
 |
 |
|
Consider transferring all your balances onto one card with a low rate. This can be a useful alternative if you'll need a long time to pay off your credit card debt. While you do have to watch out for balance transfer fees, you may be able to reduce your finance charges by moving existing balances to a card that will charge you less. Compare the finance charges, and figure out how much you would save during the time it will take to pay off the debt. Be careful, though, of teaser rates that may not lasttry to find a card that will guarantee a low rate for the life of the balance. Pay all your bills on time. Suppose you're late paying a bill to Company A. Company B can use this information to increase the interest rate charged on your credit card from Company B. This is called universal default and is common in credit card agreements. On-time payment of all your debtsincluding your mortgage and car loans, for examplecan be crucial in keeping favorable terms on your credit cards. Ask your card issuer for a lower interest rate. Sometimes you can get a lower rate just by calling the issuer and requesting it. It may help to mention a competing offer with better terms than your current card. Ask your current issuer to match the best terms you qualify for. Make bigger payments on your consumer debt before paying off your mortgage. The value of your home will typically rise over time, independently of how much is borrowed against it. If you have other debts that are more costly than your mortgage, pay them off first while making only the required payments on your house, especially if your mortgage is at a low fixed interest rate and if you can deduct the interest on your income tax return. |
Discuss this item on the forums. (0 posts)