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3 Fail-Proof Strategies To Cut Your Credit Card Interest Rates

3 Fail-Proof Strategies To Cut Your Credit Card Interest Rates

Credit card debt is a fact of life for many of us. This article isn’t about stating the obvious — avoid credit card debt, stay within your budget, don’t be late. It’s about how to make a bad situation better.

Regardless of the reasons you’re stuck with credit card debt, there are things you can do to ease the pain. In fact, we’ve found a few ways for you to turn the tables on the banks and have them pay you to borrow their money instead of the reverse! Seriously — keep reading to find out how.

Balance Transfers: Go Surfing

This is one of the most cost-effective ways to reduce the interest on your existing credit card debt. All you have to do is transfer your high interest balances from your existing credit cards to a new credit card with a low interest balance transfer offer. There are several balance transfer promotions in the marketplace that offer 0% interest rates for 12 months or more.

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The banks are so hungry for new customers that they’ll lend you their money for free for a year or more in the hopes you’ll stay a customer with them over the longterm. But in this case, loyalty doesn’t pay.

Thousands of people surf from one 0% balance transfer offer to the next, never paying any interest on their credit card debt. This is true in the U.S., U.K., and even for balance transfer offers in Canada. Just make sure to never make a late payment and watch out for hefty balance transfer fees.

0% Purchase Rates: Pump & Dump

If you’re about to make a purchase that you know you’re not going to be able to pay off right away, get a new credit card with a 0% interest rate on new purchases.

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Again, banks are more than happy to offer you 0% rates for 12 months or more on new purchases. But remember: they only do so because more people screw up than not. Know the rules, stick to them, and you’ll have those fools funding your 0% rates. Break the rules and you’ll be the fool.

We have one Golden Rule to stay out of trouble: use automatic pre-authorized payments to pay down your debt. Find out your minimum monthly payment and the due date. Set your pre-authorized payments to meet or exceed the minimum payment and you’ll never have to think about your loan again. All your payments will be automated, taking away the risk of a late payment, and losing your 0% rate, out of the equation.

Renegotiate

Let’s say you already have credit card debt and you can’t get approved for a balance transfer. Not all is lost. Believe it or not, banks are just as scared about you defaulting as you are.

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Call your bank and ask them to lower your credit card interest rates. Not every request is granted, but there is absolutely zero downside to asking. The worst that can happen is that they say no. Big deal.

That said, there is a technique that will increase the likelihood that the bank says yes. First, ask the bank if they can lower your rates. See what they offer. Then, let them know you’ve received several 0% offers from competing banks Y and Z. Tell them you’ve been a customer of theirs for a long time and would prefer not to go through the hassle of applying for a new card if they can match the offer. If that doesn’t work with the first customer service representative, politely ask to speak with their supervisor — supervisors often have more authority to offer lower rates.

Conclusion

Just because you’re stuck paying high interest rates on your credit card debt doesn’t mean you have to do so forever. Put a little effort in and you may have the banks competing to offer you 0% for the privilege of servicing your debt. When the rules don’t work for you, sometimes it’s best to change the rules or start a new game. Here’s your chance to have the banks lend you money on their dime!

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Featured photo credit: Republica / Pixabay via pixabay.com

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Marc Felgar

Marc Felgar is an aging, health & senior care expert focused on improving the lives of mature adults.

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Published on September 17, 2018

How Being Smart With Your Money Leads to Financial Success

How Being Smart With Your Money Leads to Financial Success

Achieving financial success is not something that just happens. Maybe if you win the lottery or something, but for the average person like you or me, it comes from a series of small steps you take over a long period of time.

With each step, you form a new smart money habit. And with each smart money habit, you build towards financial independence.

So what sort of habits can you form to get on that path? Let’s take a look at smart money habits you can start today to get you closer to a financially independent future.

1. Avoid being “penny wise but pound foolish”

It’s tempting to try saving a couple cents here and there when buying small items. However, that’s not where the real money is saved. You’re putting in extra effort for something that doesn’t move the needle.

You get the most bang when you’re able to cut down on your bigger bills. For example, finding a lower interest rate for your mortgage could save you $50+ per month. And cutting your transportation bill by purchasing a cheaper car or taking public transportation can provide large gains as well.

So, look at your recurring expenses such as housing, transportation, and insurance, and see where there’s wiggle room. It’s a much better use of your time than trying to pinch pennies here and there on smaller purchases.

2. When you want something big, wait

Impulsivity can get you in trouble in most aspects of life. Finances are no different.

It’s human nature to see something and want it right then and there. It starts as a kid in the checkout line at the grocery store, and it continues on through adulthood.

We get an idea in our head of something we want, and it’s hard not to go out and get it right then.

A good example is wanting a new car. Perhaps you’ve had your car for several years. It’s crossed the 100k mile mark. Maybe maintenance is due, and you’re annoyed that you need to replace the timing belt or purchase new tires.

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So, you get the itch.

You start digging around online, and you realize you could trade in your current car for something newer and more exciting… all for a few hundred bucks a month. Then you get obsessed.

Here’s where you have to take a step back.

Your newfound obsession is clouding your judgement. Rather than giving into the impulse, wait it out.

Set a timeframe for yourself. Maybe you come back to the decision three months down the road. See if the obsession lasts.

It might, but often, a funny thing happens. Often, you forget about it. And often, you find that the new car wasn’t a need at all.

The impulse faded. And you just saved yourself a ton of money.

3. Live smaller than you can afford

You finally get that big raise. And you want to celebrate – and why not?

You’ve been looking forward to this forever. And after all, it was all due to your hard work.

That’s fine, splurge a little. However, make it a one-time deal and be done.

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Don’t get caught in the trap that just because you’re now making more money, you should spend more.

Too often, people get more money and feel like they that gives them the means to buy a bigger house, a bigger car… you know the drill. Resist.

The fact is that living smaller than what you can afford is one of the fastest ways to build savings.

But if you constantly upgrade as you begin to make more, then you’ll never get ahead. You’ll just build up more debt along the way and have just as little wiggle room as before.

4. Practice smart grocery shopping

Food… it’s one of the biggest portions of any budget. And if you’re not careful, it can be one of the biggest drains on your wallet.

But luckily, there are a few things you can do to ensure that you stay smart with your money when buying groceries.

Create a grocery budget

Set a strict weekly grocery budget. When you know how much you can spend on groceries, you can then plan your weekly menu around it.

Once you know what all you need, you can go shopping and keep a running tally as you shop to ensure you’re on track.

I tend to do this in my head, rounding for each item. However, writing it down as you go would probably work best for most people.

Make a list… and never deviate

Never go to the grocery store without a list. If you go to the store with a ballpark idea in mind, you don’t have a true ide of what you need.

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You’re not well-researched. You don’t know what the sales are. As a result, you’re going to make decisions on the fly.

These impulse decisions will lead to overspending, which will derail your grocery budget.

Eat before going grocery shopping

It’s also important to eat prior to going to the grocery store. Hunger is a powerful force.

If you’re shopping on an empty stomach, everything is going to look good. In particular, you may find a lot of ready-made, processed snacks will look enticing.

After all, you’re hungry now and that food is easily available. So subconsciously, you may lean towards those items.

Unfortunately, not only are those items typically less healthy, but they’re likely more expensive. You pay for convenience.

However, when you eat prior to shopping, then you’ll shop with a clear mind. Your hunger won’t cloud your judgement, influencing you to make poor decisions like a cartoon devil resting on your shoulder whispering in your ear.

This makes it much easier to stick to your grocery plan.

5. Cancel your gym membership

Now that you’re all set on your food, it’s time to get smart about managing your budget in terms of physical fitness. And let’s begin by avoiding the gym. The gym bill, that is.

The average gym membership costs around $60 per month. That’s $720 a year.

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Yet, two out of three gym memberships go unused. That means two-thirds of people who have a gym membership are literally giving away almost a thousand bucks a year. It’s crazy!

I recommend seeking an alternative. One good alternative is to look into fitness streaming services.

Streaming services allow you to stream hundreds of workouts like Insanity and p90x, right in your own home for around $10-20 a month. That’s $40-50 less a month than the average gym membership.

Of course, then there’s the free option. The internet is full of free workouts that you can do on your own with minimal or no equipment.

For example, there’s the Couch to 5K program, that I personally used a decade ago to ease myself from couch potato to running my first 5K race. If I could do it, anyone could.

Then there are free resources like reddit that have limitless information on workouts. The Fitness subreddit has done all the research for you, populating workout tips and detailed workout routines for anyone to use in their wiki.

There are several routines that require no equipment. And you can join in on the subreddit to become part of the community, making it easier for those seeking comraderie and encouragement in their fitness goals. All for free.

It’s baby steps… And baby steps can start now!

I’ve never met anyone that can’t stand to be a bit smarter with their money. And on the flip side, anyone can get smarter with their money. But remember, it doesn’t happen all at once.

Begin by fighting your impulses. Prepare for the week and be smart at the store. And cut monthly expenses like gym memberships that are overpriced and you probably aren’t getting your money’s worth out of anyway.

The devil is in the details. And the details can change your lifestyle and prep you for a financially independent future.

Featured photo credit: Unsplash via unsplash.com

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