How to Use Low APR Credit Cards to Reduce Your Debt

The interest you pay on loans and credit cards is a part of your overall debt. If your interest rates are high, then you may want to consider using low APR credit cards to reduce debt as a whole. Transferring high interest debt to low APR credit cards effectively reduces the total amount you owe as well as the monthly payments. These reductions can help you achieve your personal financial goals of getting out of debt sooner.

Instructions

1

Call your high interest debt accounts. You have to get your payoff balances on your accounts so you know exactly how much you owe. This also gives you an idea of how much credit you need when applying for new low APR credit cards.

2

Assess interest rates. If you have current debt with a 29% interest rate, then a 15% interest rate will seem low to you. Generally, when using low APR credit cards to reduce debt, you need cards with an interest rate of 10% or less.

3

Apply for at least two low APR credit cards. You need to know how much credit the low APR credit card companies are willing to extend to you. The credit card companies won't give you a credit limit until they approve your application. Applying for two low APR cards allows you to spread your high interest debt between the two cards while staying below the credit limits for each card.

4

Transfer you high interest debt. Many credit applications include an option for transferring debt from another high interest credit card to the new low interest card for which you are applying. Check the box and provide all the necessary information requested.

5

Call your high interest creditors. If during the application for the low interest credit card there was not a transfer option, call your high interest creditor and pay off the debt with your new low interest credit card.