Credit card rates, the way credit card companies make money off of us, often much to the disdain of the card holder. There is no doubt that credit card usage has soared astronomically recently. Much of this is due to consumers purchasing beyond their means, but technology can also be blamed to some extent. It is just so much easier to use a credit card than to pay cash or make purchases with a check. Recent commercials even stress the quickness and ease of using a credit or debit card when purchasing items. This credit card use has gotten many into debt that is often hard to remedy.

There are many ways to get out of this debt, but one way is to negotiate your rates for your credit card balances. Very seldom will an individual be successful in getting a rate at zero to five percent. It is possible to work very consistently in the five to ten percent area.
Most people carry three to seven, perhaps even more credit cards, and each of these have some balance on them. The first thing to do is to consolidate the debt as much as possible. Place the balances on one, two, or three of your cards if possible. This leaves a zero balance on the remaining ones.

Pick one card that is going to be used for emergencies, and only emergencies. Let's face it. If you have balances on a credit card, it is usually because of overspending. There are going to be times when an emergency purchase is going to be necessary. Children get sick and need medication, tire blows out on the car, etc. The emergency card that is used for emergencies should be the first one paid each month if it is used. This card is also not involved in the rate reduction plan.

Now there are one or more credit cards that have no balance on them at all. Leave those for two maybe three months with nothing on them. They will start contacting you, wanting you to transfer balances to their card. You see, they do not make money off of you without a balance on the card. Five percent of ten thousand dollars to them is better than twenty percent of zero. Pick the one that is the lowest, and contact them for the balance transfers. When you call, make sure and ask them if they are sure there is not a lower rate for you. Sometimes they can find a lower rate, but it might be for a shorter amount of time. Do the math, and see which will save you the most money. Choose the proper one and move the money. Move as many as necessary, and keep the money as consolidated as you can, leaving cards with no money on them with the thought of transferring at a later date.
One thing to remember is that you are probably going to have to pay a transfer fee. This is usually a percentage of the money to be transferred with a top end amount. This can also sometimes be negotiated. Figure this amount in with your interest rate savings to be sure it is still savings.

Be sure to watch for when the interest rate ends, because the card then returns to a large percentage on the balance remaining. You start the whole process over again, transferring to the zero balances. By this time, they will be ready for your money to be moving back to them. Don't forget, negotiate these rates as balance transfer fees as well as you can. Ask for low rates and consolidate balances. This is one step in the road to debt reduction.

Learn more about this author, Bret Strecker.
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