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Old June 19, 2017, 10:34 AM
sandalwood sandalwood is offline
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Join Date: Sep 2011
Posts: 459
Default Re: How to reduce your credit card interest rate payments...

Quote:
Originally Posted by Dien Rice View Post
Many people are struggling with the burden of debt... Credit card debt in particular is quite expensive, where you can pay from 14% to 25% per year in interest...

For example, the average credit card debt per household in the USA, for those that have credit card debt, is $16,048.

At the average variable credit card rate of 16.1%, that means these households are paying $2,600 per year in interest rates! For those paying the maximum credit card interest rate - around 25% - they're paying around $4,000 per year in interest!

That's pretty significant...

However...

I've recently been looking into peer-to-peer loans...

Peer-to-peer loans are non-bank loans, where you are borrowing money from investors. They invest because they can get a much better return than they can from putting their money in a bank account. In return, they can often give you much better rates than a bank can, as well. It cuts out the middle-man!

In the USA, you can get peer-to-peer loans from as low as 7% (including the initial fees), and they go up from there. (Sometimes quite high.) What rate you get depends on the peer-to-peer loans company you are with, as well as your credit score.

Here's a list of peer-to-peer loan companies in the USA...

http://peerfinance101.com/list-peer-...e-loans-sites/

(You can easily find similar lists for other countries if you search online...)

If you have high-interest-rate debt (such as credit card debt), it makes sense to refinance it with lower interest rate debt... So, if this is the case with you, check this out as a possibility!

By the way, it's a good idea, once you pay off your credit card with a lower interest rate loan, to at least reduce your credit card limit! That will help prevent you from increasing your debt further!

By the way, why am I writing about this?

It turns out that the rate of starting businesses in the USA has declined... Many people have fingered the big culprit to be debt. The main debt which has increased dramatically in the last 20 years or so is student debt... Students leave college now with astronomical debts compared to the past.

The reasoning is that people with large debts will take fewer risks... And this hurts entrepreneurship, which has risk. People still love entrepreneurship - that's why TV shows like Shark Tank and Silicon Valley have done so well. But the idea is that higher levels of personal debt have made people less willing to take risks than the past...!

So... In my opinion, we gotta solve that problem, somehow...

Any other advice you know of, or which has worked for you? (I need to reduce my own credit card debt as well...)

Best wishes,

Dien

Great topic. Thanks for starting the thread. Here is what I did with a debt I inherited (long story so I'll spare that part). I was paying interest on that debt until my brain moved from frozen to thinking. I transferred the balance via an interest free offer from a credit card. It also was fee free.

When the no interest charge period expired I again transferred the remaining balance to another credit card. This time I had to pay a transfer fee which was not welcome but was a hell of a lot less than the interest I would have charged had I not made the transfer.

This month I will write a check for the balance and be free from the debt. Ordinarily I always pay the balance in full before the due date. This was an unusual family circumstance. Regardless, the lesson is pay attention to the credit card transfer offers currently being touted. Several super large organizations are offering interest free balance transfers that allow up to 18 months to repay. If you can arrange your payments accordingly you won't pay a dime in interest. That is a great deal.
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