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Card Category: All Business Charge Foreign Poor Credit Pre-Paid Regular Reward - Airline Reward - Auto Reward - Cash Reward - Finance Reward - Gas Reward - Hotel Reward - Retail Reward - Sports Reward - Travel Reward - Other All Reward Cards Secured Student Intro APR: All 0.0% 1.9% or Less 2.9% or Less 3.9% or Less 4.9% or Less 5.9% or Less 6.9% or Less 7.9% or Less 8.9% or Less 9.9% or Less Time Period: All 3 Months or More 4 Months or More 5 Months or More 6 Months or More 7 Months or More 8 Months or More 9 Months or More APR (Purch.): All Less Than 6% Less Than 7% Less Than 8% Less Than 9% Less Than 10% Less Than 11% Less Than 12% Less Than 13% Less Than 14% Less Than 15% Less Than 16% Less Than 17% Less Than 18% Less Than 19% Less Than 20% Less Than 21% Less Than 22% Less Than 23% Less Than 24% Less Than 25% Annual Fee: All $0 $10 or Less $20 or Less $30 or Less $40 or Less $50 or Less $60 or Less $70 or Less $80 or Less $90 or Less $100 or Less $110 or Less $120 or Less $130 or Less $140 or Less $150 or Less

Tuesday, November 18

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Manage Debt (Part 2)

Ten Ways You Can Pay Off Your Debt (part - 2)

5) Transfer Debt To A Low-Interest Card:

If your low-interest card hasn't been maxed out, and your creditor allows, you should consider transferring all your high-interest debt to it. This strategy won't eliminate your debt, but it can lower your costs. Call the bank that issues your card and ask for a lower rate. Tell them another company has offered you a better rate with no annual fee. You will be surprised at what your lender will do to keep your business.

Another alternative is to take advantage of the introductory rates many card issuers offer to get you to switch credit cards. We've all seen the rates that start out at 5.9%. This temporary solution may save you a few bucks in interest and allow you to pay down more principal each month.

A word of caution: Read the fine print before you act. Many of these "teaser rates" last only a few months. After that, the rate may rise dramatically, even exceeding the rate you're currently paying. The terms of your card may also stipulate that the low rate applies only to new purchases, not existing balances and that it is valid only to account balances kept for at least a 12-month period. Be careful how you execute this strategy.

6) Borrow From Family Or Friends:

Borrowing from your family or friends is worth considering. After all, they know you, trust you, and probably understand your financial situation better than anyone else. They might even cut you a favorable interest rate or repayment plan. Make sure you put the agreement in writing and that all parties involved understand the terms and conditions of the loan. Keep this part of the relationship professional.

Some alternatives to help solidify the deal:
a) Call the loan an early inheritance and  make sure your siblings fully understand your financial situation so they don't get upset.
b) Split the difference. Pay them an interest rate that is less than what you're currently paying but considerably higher than what they would earn in a liquid account.

7) Cut Expenses:

An effective way to find money and pay debts is to reduce your expenses. Is it possible that what you consider necessities are really optional? There are a variety of things you can do in your daily life that can produce big savings. Here are a few simple suggestions:

• Pack your own lunch for work
  
• Buy generic brands
  
• Buy second-hand clothing or furniture
  
• Cancel your health club membership
  
• Clip coupons
  
• Cancel your cable service
  
• Cancel your extra phone services such as Caller-ID or Call-Waiting
  
• Read books, magazines, and newspapers at the library instead
  of buying them
  
• Carpool to and from work or school
  
• Skip your daily latte or candy bar
  
• Rent movies instead of going to the  theater and buying those
  expensive goodies

8) Obtain A Home Equity Loan:

If you own a home and have accumulated equity throughout the years, you might consider a home equity loan, also called a second mortgage. Many lenders allow you to borrow against a certain percentage (usually 80%) of the equity in your home. For example, if you owed $50,000 on a house that was appraised at $150,000, your equity would be $100,000 ($150,000 - $50,000). You'd be able to borrow up to $80,000, or 80% of $100,000. 

You can use this type of loan to pay off all your outstanding debts and start paying only one monthly payment at a lower interest rate. The interest on home equity loans is generally tax-deductible if you itemize on your income tax return. You're effectively getting one of the cheapest rates for personal consumer debt.

This type of debt consolidation is not for everyone however. It only works if you stay disciplined and avoid charging up your cards again. The last thing you want to do is have credit card bills to pay on top of the home equity loan payments you've just established.

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