Paying off your credit cards is likely at the top of your list for digging out of debt. While achieving a zero balance generally takes time, it's possible to reduce your debt more quickly by making strategic choices regarding the type of credit card accounts you have.
Consider these tune-up tactics for credit debt relief.
Zero-percent balance transfers
Balance transfer credit cards that don't charge interest for an extended period of time, such as 6 or 12 months, give you a chance to save on interest. Reduce debt by using the interest savings to make larger payments on your credit card. For instance, if you've been paying $200 a month on credit card interest and you transfer the balance to a 12-month no interest card, you can put an additional $2,400 towards the balance in a year.
Always read the fine print of balance-transfer offers. Some credit card issuers charge fees for balance transfers that could potentially negate any benefits of transferring the balance.
Low-interest card options
When it comes to interest rates, the best credit cards are those that only add a few percentage points to today's prime lending rate. Locking in such a low rate is especially useful when the prime rate rises. Transferring your balance to such an inexpensive credit card offers you a chance to enjoy lower finance charges, which gives you more money to put toward paying off your balance.
Better card benefits
Considering the wide variety of rewards cards available today, when shopping for a new card for your old balance, it makes sense to get as many benefits as possible from your credit card account.
Depending on your preferences and lifestyle, look for those cards featuring rewards like gift cards, cash back, gas credit or airline miles and hotel points. The cash-back option provides you an easy way to pay down debt on your card, and other types of rewards free up money spent. All of these savings give you the opportunity to earmark additional funds for paying off debt.
Credit card balances can sometimes seem insurmountable, but these tune-up tactics can help with debt reduction.
About the Author:
Julie Bawden-Davis is a Southern-California-based writer specializing in personal finance and insurance. Since 1983, her work has appeared in a wide variety of publications, including Family Circle, Ladies' Home Journal, Parenting, Entrepreneur and The Los Angeles Times.