How to Beat Credit Card APR

Credit card debt is a vast problem that will keep getting worse unless you tackle it head-on. And with increasing interest rates, it seems you'll never get rid of the surmounting debt. APR stands for annual percentage rate, which is the percentage of your credit card balance that you will be charged in addition to your purchases. Fortunately, there are ways to handle the problem of credit card APR, get rid of it and prevent from racking up new debts.

Instructions

1

Assess your financial situation. Figure out how much debt you actually have (which can be a scary process). This is an important first step. Also take into account your monthly income and what you can realistically contribute to paying off your debt each month.

2

Create a plan for attacking the debt. Begin by reducing your spending each month. Put your credit cards away and don't use them. Some experts recommend freezing the cards in a block of ice or cutting them up. This will stop you from increasing your debt. If you have several cards, consider closing some accounts.

3

Transfer your high APR balances to lower-rate cards. Some companies offer a 0% introductory balance transfer rate. The cards typically will charge a one-time balance transfer fee but can save you a lot of money in finance charges. Once you've transferred the balance, work to aggressively pay off the balance while under the 0% APR period.

4

Call up the credit card companies to negotiate a lower APR. It won't fix the problem, but it can save you some money in the long run. This can be very effective. According to a Massachusetts study, 56% of people who called the lenders lowered their interest rates within 5 minutes

5

Begin paying off your highest APR cards first. Once that debt is gone, move on to the next highest rate. This will ensure you minimize the amount of finance charges you're paying.

6

Avoid late charges by paying all your bills on time. Not only will these charges add to your debt, but your credit card APR could increase. If you're likely to forget to pay the bill, set up an automatic transfer from your checking account.