If you’re paying interest on credit cards, please try to stop doing that. Credit card debt is the worst kind of debt. The APRs are higher than almost any other type of loan. And unlike so-called “good debt” like a mortgage or an auto loan that helps you afford a roof over your head or a safe ride to work, credit card debt is a bad investment — it doesn’t help you build a better future.
Perhaps the worst thing about credit card debt is that you don’t get anything valuable for that interest you’re paying. Credit card interest makes you keep paying more money for stuff you already bought, like zombie transactions getting more expensive over time.
But even if you’re paying credit card interest, it’s not too late to make a plan to get out of credit card debt. Here are a few easy strategies to help slash your credit card interest to zero.
1. Use a 0% APR balance transfer credit card
The fastest, most aggressive move you can make to reduce your credit card interest is: opening a 0% APR balance transfer credit card. If you have good enough credit to qualify, these cards let you move your existing credit card debt to a new card account — and get 0% APR for several months.
Ready to pay off credit card debt faster with zero interest? Click here to see our curated list of the best 0% APR balance transfer credit cards — some give you up to 18 or 21 months to pay down your credit card debt with zero interest!
Keep in mind that a 0% APR balance transfer card is not a get out of jail free card. You still have to pay off the debt, and you will likely owe balance transfer fees as a small percentage (often 3%-5%) of your total debt that you’re transferring to the new card. And if you don’t pay off the full amount of your transferred balance within your new card’s introductory APR period, you could owe even more interest.
2. Ask for a lower APR
Not ready for a balance transfer card? That’s OK too. As a credit card customer, you have the right to ask your current credit card company for a better deal — by lowering your APR. Not every credit card company will allow this, and not every person will qualify. But it’s worth asking!
Call the customer service number on the back of your credit card, and be prepared to mention:
- How long you’ve been a customer
- Your current credit score
- Your positive history of paying credit card bills on time
- Other credit card offers that have lower APRs that you might qualify for
If you’re a good customer and haven’t been late making payments, your credit card company might reduce your interest rate. This won’t take your credit card interest to zero, but getting a lower APR can help you save money on interest — and pay off credit card debt faster.
3. Pay off higher-interest cards first
In case your credit score doesn’t qualify for a balance transfer credit card, you just don’t want to open another credit card, and your credit card company won’t lower your APR, that’s fine. You just need to focus on paying off credit card debt as fast as possible.
If you want to save maximum money on credit card interest, focus on paying off the cards that charge you the highest interest rates first, and just make minimum payments on everything else. As soon as your highest-interest card is paid off, shift that monthly cash flow to your other lower-APR cards. This technique is known as the debt avalanche method of getting out of credit card debt.
4. Use budgeting apps
Many people have credit card debt. There are great budgeting apps available, many of them free or with low monthly fees, that can help you visualize your finances, calculate debt payoff schedules, and understand your monthly spending patterns.
Getting a better sense of where your money goes can help you direct even more cash toward paying off your credit cards and getting out of debt faster. Spending a few dollars on a budgeting app could help you save hundreds of dollars in credit card interest.
5. Seek credit counseling
If you’re having trouble paying your bills and your credit card debt is getting bigger, you might want to talk with a credit counselor. These nonprofit agencies can help you work with credit card companies to reorganize your debt with affordable monthly payments. Credit counseling won’t reduce your credit card interest to zero, but it can lower your stress and get your personal finances back on track.
6. Last resort: Consider declaring bankruptcy
No one ever signs up for a credit card with the goal of declaring bankruptcy, but sometimes it happens. If your credit card debt has become unbearable and you have no hope of paying it off, filing for bankruptcy might become a valid option.
Keep in mind that there are long-term consequences to filing bankruptcy. It stays on your credit report for several years and can make it harder for you to qualify for other loans. But as an American, declaring bankruptcy is one of your legal rights — and sometimes it’s the best choice to get out of a financial crisis.
Bottom line
Credit card interest doesn’t have to drag you down. Look for ways to negotiate a lower APR with your credit card company, use balance transfer cards and budgeting apps, or seek credit counseling if your debt is unmanageable.
