A little purchase here and there, a must-have deal, and a sudden emergency can all quickly balloon into debt. Credit cards are convenient ways to buy items online and when we need them but do not have the cash.
However, they can be a problem if you rely on them too much and accumulate too much debt in a short amount of time. If you find yourself facing a mountain of credit card bills, you can make small changes that will make big differences. Get a hold of your finances by taking advantage of these easy debt solution options.
Credit cards want your business. They often make offers too good to be true, like zero interest for months and, sometimes, more than a year. A period of no interest might have got you into debt, but it can also get you OUT of debt. You can move your current debt onto a credit card with a special promotion, or pay it off with a personal loan. Both of these possibilities can save you money on high-interest rates often seen with credit cards.
Credit cards typically have high rates in the 20 and 30 percent range. Some companies may offer zero percent interest for a limited period. This allows you to make purchases when you want and pay them later without getting a higher balance due to interest fees.
You can do a balance transfer that moves all your debt into an account that does not have interest. During the interest-free period, you can pay off your debt.
For example, you could pay $250 a month for two years to knock out $6,000 worth of debt. You could avoid $750 to $900 in interest charges if the account had a 12-percent interest rate.
A credit card company might offer an interest free balance transfer charge you a nominal fee. Shop around with different companies to find a long promotional period without high transfer fees.
You can also apply for a personal loan to pay off your high-interest credit card debt. Then, you pay off the personal loan with monthly payments. Personal loans often have lower interest rates, which can save you time and money.
Do you have more than one or two extended credit cards? Debt consolidation can make your monthly bills easier to manage.