Readers regularly write to me asking what options they have for lowering credit card interest rates. Many people inquiring about consolidation are making monthly payments on time, but are only barely getting by, and some months end up taking money from one credit card to pay another, and are running out of balance transfer options.
If you are stuck in a similar situation, here are three common ways you can reduce your interest rates on unsecured loans and credit cards.
You take out a consolidation loan and use all of that money to pay off the credit cards and higher interest personal loans.
Your current debt to income ratio may prevent you from qualifying for a debt consolidation loan in the size that you would need to fully pay off all of your credit card bills.
In fact, I do not see unsecured consolidation loans as high as many of us would need these days.
If you are only able to secure half of what you would need to consolidate, it still could make sense to use a consolidation loan to lower monthly debt servicing costs, just less so.
Debt Consolidation Company
You can use a debt consolidation company for their established relationships with your banks in order to combine all of your balances into one smaller monthly payment, and pay that same fixed monthly amount of money until all of your credit card balances are eliminated.
I cover the benefits and drawbacks in this article series about debt consolidation counselors
You can call my hotline 800-939-8357 and choose option one to speak with a counselor and get an accurate quote for what your lower interest rates would be, and how much your monthly payments will be reduced.
Credit Card Hardship Plans
I cover how to get your credit card interest rates reduced by yourself. Much of that article series relates to recession era bank policies. But I am now seeing several credit card banks return to that era’s hardship plans due to COVID 19.
If you are unable to get your banks to work with you on long term hardship repayment plans (at seriously reduced interest rates) they may still give the debt consolidation companies the lower interest rates for the life of your balances.
The more credit cards you have to attempt to get lower interest rates from, the more of a juggling act it can be doing self administered hardship plans. Because calling a credit counselor is a fairly quick and free way to get a baseline monthly payment quote, I typically suggest starting with that call. You take the quote and sleep on it for a few days, or weeks, and compare that to the debt consolidation loan interest rates and amounts you qualified for.
If for any reason you determine your situation is now beyond debt consolidation being helpful, and you want to compare consolidating with settling debts for less, you are welcome to schedule a call with me, or requesting a debt settlement quote below.