How to Reduce Credit Card Interest With Debt Services

If you're struggling to keep up with your credit card payments because of your interest rate, negotiating a lower rate is the first step to making your debt manageable. While you can talk to your credit card company yourself about lowering your interest, you might decide to work with a debt services company if you feel overwhelmed. Different types of debt services companies offer various forms of help. Credit counselors often offer debt relief services to help you negotiate interest rates and plan a budget. Debt management services consolidate your debts and require you to make a payment to the company each month. The company uses that payment to pay your unsecured debts and possibly negotiate lower interest rates on credit cards and loans. Debt settlement companies attempt to lower the total amount you owe. This can have a significant impact on your credit, so save debt settlement attempts as a last resort.

Instructions

1

Speak to a credit counselor about your debt for free. Many credit unions, universities and Cooperative Extension System offices offer free credit counseling to help you work out a budget. A credit counselor can give you advice on negotiating your interest rate with your credit card company. For a referral to a counselor, talk to a representative at your financial institution.

2

Ask your credit counselor to suggest a reputable debt services company if you determine that you need to consolidate your debts or lower your interest rate using professional help.

3

Ask several questions of the debt services company before you agree to a plan to reduce your interest. The fees the company charges might be more than you can afford. Make sure you understand exactly what services the company is providing, as well as how long it will take to lower your interest and what penalties there are for making late payments or not following the plan completely.

4

Request the debt services company send you free information on the program you're considering. If the company won't provide the information, look for another company. Legitimate debt relief, debt management and debt settlement services are honest and open about terms and fees as well as what the company can and cannot do.

5

Call your credit card company once your debt services company outlines its plan to lower your interest rate. Ask your credit card company if the terms your debt services agent provided are accurate before you agree to the debt services company's plan.