Reducing credit card debt can make it much easier to lead a fiscally sound life. Fortunately, there are many ways you can go about reducing the amount of credit debt you have to deal with. Lowering your interest rate, reducing your balance and ultimately lowering your monthly payment is possible if you know what to do. What are the best ways to reduce your credit card debt?
Lower Your Interest Rate
Creditors charge an interest rate to protect against the risk they are taking by extending you a loan. Borrowers who show a lower risk will generally get a lower interest rate. However, there are a couple ways you can have your current rate lowered significantly.
The first way to lower your interest rate is to ask your credit card company for a reduction. Yes, a lower interest rate can be as easy as a phone call. They will generally reduce your rate in order to keep your business. Even borrowers with bad credit can have their rates reduced from 30 percent to as low as 15 percent.
Another way to lower your interest rate is to consider signing up with a credit union. Most credit unions will offer rates that are below the national average. Transferring your current balance to a credit union can save you 5, 10 or even 15 percent off your current interest rate. The best news is that you can still get a card from a company such as Visa or MasterCard.
Lower Your Balance
The next step after lowering your interest rate is to lower your credit balance. Going after a debt settlement program is the fastest way to have your balance lowered.
Debt settlement is great for those who are having a financial hardship. Losing a job can reduce your monthly income by quite a bit. However, you can use this to your advantage when negotiating with your creditors. Take whatever savings you have in the bank to pay off your debt for less than what you owe. It is possible to see your credit card debt reduced by as much as 50 percent.
Your Credit Payment Will Be Lower Each Month
You can choose a flexible payment plan with the debt settlement program offered by National Debt Relief. Let’s say you owe $20,000 in credit card debt. Your old interest rate was 25 percent based on a credit score of 650. Your monthly payment would be roughly $1,000+ each month based on a 5% minimum payment required.
When you choose to reduce your credit card debt with settlement, you need to save up approximately half of your balance to make a good settlement offer. So you could make payments of $500 a month into your settlement fund, realizing a savings of $500 a month.
Keep in mind that the more money you can save and the faster you can save it, the faster you can get out of debt.
You will also see your credit score go up as well once you have settled your debts and start making all your payments on time again. A credit score that started off at 650 could easily go up to 700 or more as debt is being paid on time. This will allow you to borrow at a better interest rate in the future.
Pursuing a reduction in your credit card debt is something you should seriously consider. You can save yourself hundreds of dollars each month in reduced interest and principal payments. Reducing your debt will eventually make it possible to completely eliminate your debt. Imagine living a life where you decide where your money goes instead of your creditors. Give National Debt Relief a call to see how much you can save on your credit card debt. Speak to a qualified professional who can show you how much you can save on your current credit card debt.