However, something that can help your monthly payment without increasing the interest rate or the length of time you will need to payoff your credit card is to look at the advertising you get in the mail for new charge cards. That is, these financial companies will frequently offer you a new charge card at a very small “teaser” interest rate of say 3% (instead of the usual 18%) for the first year. Obviously, it is worth their effort to offer this in order to get a new customer. Along with the small interest rate they will quite often suggest you transfer your outstanding balance(s) from higher interest rate cards. They figure that you will transfer these loans to their card for which they will give you a lower rate for one year and then up the interest back to 18% at the end of the year and you will not even notice. And most people do not notice! However, if you are serious about having more money in your life, you will pay attention and mark 11 months on your calendar. When you have used their low rate for 11 months, start watching the ads again for a special low rate on a new card. This way you are continuing to payoff the outstanding balance but with a smaller payment or the same size payment with more of your money paying the outstanding balance rather than the interest owed.
There is another type of credit card that people have a tendency to overlook. Let’s say you go into a store to buy a new mattress and box springs. You can fill out a credit form at the store and make monthly payments on your new purchase. The store has simply contracted with some lender to put this charge onto a charge card. You now have another card payment to make each month. If you need that new mattress set, take your time and shop around for a store offering “no payments and no interest for one year”. Now this may seem like you are just delaying the inevitable payment. Yes and no. Most important, as with any loan, you do not want to use this unless it is for something absolutely necessary. After you are out of debt you can buy things you simply want to have. The secret to this type of buying and saving money is to, again, mark your calendar. Before the time period is up you will need to find one of these charge card specials for 3% or so.
Yes, this does take some extra time and thought on your part, but it does allow you to save quite a bit of money over the course of this small loan. However, there is one warning. Be very careful and make sure they are offering “no payments and no interest for one year”. Some companies offer no payments but you still have to make the interest payment each month. Needless to say, we want to avoid as much interest as possible, not pay more.
