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How To Pay Rates As Low As 0%

Most Americans are paying interest on revolving credit. Why not get a balance-transfer card instead of letting the credit card companies have all that interest? Some cards let you transfer balances at rates as low as 0% for twelve to fifteen months, after which the rate will rise to a new rate somewhere between 8% and 20%, depending on the card. Occasionally the interest rate will be 3.99% to 6.99% for the entire life of the balance instead of just one year -- a better deal if you foresee paying off the card slowly. The zero-percent deal is better if you plan to pay off the balance soon, or if you plan on getting a new zero-percent card each year.

Any balance-transfer card will charge higher interest on new purchases. Your payments will go towards paying off interest first, then the transferred balance. Your new purchases are paid off last and interest on them will keep building up in the meantime. It's usually best to use these cards only for the low-rate balance transfer. See the Best Balance Transfer Cards page for a list of these cards.

Two good sites to search for cards are CreditCards.com and ConsumerCardReport.com. CreditCards.com lists more offers, while ConsumerCardReport.com excels at consumer-friendly advice. They provide unbiased tips to help you quickly select the optimal card for your individual needs.

Consumers who can't obtain a balance-transfer card should definitely try calling their credit card companies and asking for a rate reduction. You can read an excellent little tutorial showing how to do just that in Talk Your Way Out Of Credit Card Debt. If that fails, think about paying off your debt at lower interest by borrowing more cheaply using home equity loans, kindly relatives, your 401(k) plan, or your life insurance policy.

(Next Gem: Your Estate (or is it "E-State"?))

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