Knowing your credit card interest rate is key to managing debt
Negotiate lower rates or switch to a zero-interest card to manage payments
InvestigateTV - A new study from NerdWallet reports that 43% of credit card holders do not know the interest rate on their cards, even though according to experts, knowing your interest rate is the first step to managing credit card debt.
Sara Rathner, a personal finance expert with NerdWallet, suggested you look at your recent statement or log into your account to find your current interest rate.
With that information, Rathner said you can find ways to save money such as negotiating a lower rate with your issuer or transferring your balance to a 0% interest card. You could also consider a personal loan to pay off the debt.
Rathner’s bottom line is that high interest rates hamper your ability to pay down debt.
“This has the potential to cost you hundreds or even thousands of dollars a year, depending on how much debt you have,” Rathner said. “Think about all the other things you could do with that money, all the other bills that you could pay and other debt you could avoid because you don’t have hundreds of dollars’ worth of interest.”
By paying only the minimum on a credit card every month, the bulk of the payment may be interest, with only a small fraction going toward reducing the debt you owe.
If you are struggling with debt, USA.gov has free resources available for dealing with debt and many other topics.
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