How to Get Out of Debt - Making Credit Cards Work

If you are like most Americans, you probably have at least one, if not several, credit cards in your wallet or purse right now. On average, credit cards have an interest rate of about 13%. Of course, you may have a card with interest rates ranging anywhere from interest free to up to 40% annually. If you are unsure as to what your interest rate is, it would be a good idea to take the time to carefully examine your statement. Once you know exactly what your interest rate is, you may want to consider switching to a card that offers a more competitive rate.

One of the things that many individuals fail to realize is that the interest rate being charged on their credit card is not a hard and fast rule. Interest rates are negotiable. If you find that there is a similar card with a lower rate available to you and you call your credit card company informing them of this, they will often match the interest rate in order to keep you as a customer rather than seeing you transfer your balance to a nether card. While this does not always work, it is a good way to save a little extra money.

Another thing to keep in mind when it comes to getting the most out of your credit card and getting yourself out of debt is that late fees are big business for credit card companies. A single late fee may cost you as much as $40. In fact, some reports indicate that almost a third of the revenue earned by credit card companies is from the late fees that they collect. Like interest rates, late fees are negotiable. If you call and ask your credit card to waive the late fee, you may be surprised that they are often more than willing to do so.

One of the most important things to keep in mind when it comes to getting out of debt and staying out of debt is that most credit cards offer attractive introductory offers that disappear after a few months. Many credit cards will offer 0% interest for anywhere from six months to two years. Once that introductory rate disappears, however, you may find that your interest rate has jumped as high as 30% costing you a substantial amount of money every month. Keeping track of these teaser offers can save you money in the long run.