Did you know that if you call your credit card company today, you can get a lower rate? Just ask them. 90% of the people who do this can get their rate knocked down because your bank wants to keep you as a client. This step alone would mean substantial savings for the average credit card holder. Use our credit card payment calculator below to compare your current rate with rates of other cards.
Once you’ve made that phone call, it’s time to do some extra work. You’ve probably received a consolidation offer in the mail in the last 2 months. You can even do online searches for good low rate credit cards that accept balance transfers. Compare your current interest rate with the lowest offer using the second credit card payment calculator below.
Remember that balance transfer fee is
a percent of the total amount to be transferred
If the savings is substantial, list your cards one by one on the offer and then send it off. Better yet, you can do it over the phone. Once the process is finished, wait a couple days and call your old credit card companies to make sure the balances have been transferred. When this is done, cancel all of those cards except one. You don’t need a bunch of cards open under your name because this makes your FICO score lower. You can keep the one old remaining card for emergency purposes.
I’m sure you’ve probably heard that the Marlboro man of the 80s and 90s is dead now because of smoking. He was the picture perfect image of manhood in the wild west but lung cancer eventually took him down. During his heyday, do you think he would have listened if you had told him that smoking causes cancer? Probably not. I see people like this every week in the gas stations. I go in to get coffee but end up waiting a while in line because the guy in front wants to buy cigarettes and lottery tickets (seems like the two go together). The debtor mentality is the same. There are some people who are content with being comfortable now at the expense of their future well being. This type of person could use our credit card payment calculator and get a great consolidation deal, but end up borrowing more from the card’s remaining credit line. This new debt always has a high APR and is only allowed to be paid off at the end of the payment schedule. So the cycle of debt continues and he ends up back where he started. If you fit into this category, you really have to make a once and for all decision not to make use of that extra credit line. Actually, you should cut up your new credit card when you receive it in the mail so you’re not tempted to use it. I consider it my obligation to warn all who might fall into that trap again.
Other credit card payment calculator tips
1) You may choose a consolidation plan that would offer a lower APR that reduces your monthly minimum payments but watch out if the term of the loan is extended. This seems advantageous but you cannot ignore the extra interest you will be paying.
2) Securing your new loan on your house means that you could lose it. Can you believe that there was a woman who lost her home to a bank because she couldn’t pay the final $6?
3) Prepayment penalties are a drag. Make sure that you get a loan that can be paid off anytime.