Financial stress is a major issue for many Americans, with almost 75% reporting they worry about money often. This is not surprising considering how ubiquitous student loan debt and mortgages have become. Along with these, many of us are struggling from rising health care costs and credit card debt. Whatever the cause, for the sake of our health and sanity, we have to get our debt under control.
Although it may seem counter-intuitive, there are ways to use credit cards to help get out of debt, if used responsibly. These tips will help you to get out of debt sooner by lowering your overall balance. They are not quick fixes, so it is important that you are diligent and faithful in your payments in order to reap the benefits.
Apply for Low Interest or 0% Offers
If you qualify for 0% credit card offers, it may be worth it to transfer some (or all) of your credit card debt to this type card. Make sure to check the balance transfer fee to ensure it does not exceed the amount of interest you would be paying if you leave your credit card debt on your old card. Also, consider the length of the low interest or 0% offer and how high the interest will be raised once the offer period ends. All these factors will determine if the offer is really a benefit to you.
Request Lower Interest Rates from Current Lenders
Most people do not know they can contact their credit card company and request a lower interest rate. If your account is in good standing, you have a good chance of having your request accepted. Many times, you don’t even need to make a phone call and can make the request through a form on the company’s website. Lowering the interest rate will lower your monthly payment and your overall debt amount. It is certainly worth the effort to get out of debt.
Use Current Cards Regularly and Responsibly
Even though you are trying to avoid debt, using your credit cards to prove your credit-worthiness is a stepping stone to getting out of debt. Credit agencies base your creditworthiness on more than the amount of debt you are carrying. Some other components are:
- the length of your accounts
- your ability to pay your bills on time
- the number of open accounts you maintain.
By using one card to pay small bills and paying that balance at the end of each month, you are showing that you can maintain an account. This will help to improve your credit score which will eventually put you in line for better refinancing options (like 0% credit card offers) to get out of debt sooner.
These measures should not be the only ones you rely on in a plan to be debt free, but they are a great resource if used wisely. Credit cards are not your enemy, they are a tool, and can be wielded to help you get out of your current situation. If you are willing to be really meticulous in handling your debt repayment plan and savvy in getting the numbers down, you will see the light at the end of the tunnel before you know it.
If you are interested in researching credit card offers, see if one of these credit cards is the right fit for your needs.
