July 02, 2010
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The Secrets Of Paying Down CC Debt, Pt.2
Change your strategies.Although we all have our favorite bank and credit card company, however, if calling the company didn't work, you'll need to change strategies. Take advantage of another company's zero percent transfer balance. Before accepting any offer, check around. Some credit card companies offer a 6 month transfer promotion and others a 12 month promotion. Of course, the longer the better. Check the balance transfer fee. Typically the fee runs about 3 percent on the amount being transferred although some banks have raised it to 4 and 5 percent. Compare the cost of the transfer to what you'll be saving during the promotional time and going forward. Lastly, what will be the credit card interest rate once the promotion is over? If the new interest rate is higher, skip the balance transfer; however, if it is relatively lower, go for it.
Another growing and popular borrowing method is a social lending site online. These sites are often referred to as Peer to Peer lending. These sites have grown in popularity because borrowers are able to find better lending rates that might be lower than their credit card interest rate. Social lending sites typically provide faster answers to your inquiries and are easier to finalize lending contracts. You'll need to do a little work on your own by putting a proposal together requesting a significantly lower interest rate than what you are currently paying on the credit card. If you choose this avenue, a good place to start is the LendingClub.com.
Discuss your credit card debt with a trusted and close friend or family member. Although some experts say borrowing from your family is never a good idea, there are some instances where if handled properly, it could be beneficial. Most importantly would be to draw up a contract and determine interest rate, payment timelines, and any late charges or applicable fee that may be agreed upon.