Credit card providers charge cardholders rates that are far above what consumer can receive when investing their money. If you have a savings account, you can earn as much as 5% interest, but if you owe on a credit card, you could be paying 24% or more on the outstanding balance. It is allowable by law for creditors to charge high rates, but these rates can put you into debt quickly.



So, what about those zero percent credit card offers you still read about? There are some creditor card providers offering consumers interest free financing for six, even twelve months. On top of that balance transfers from high interest rate credit cards to these lower rate cards make them very appealing. One caution: as interest rates have climbed, many of these zero percent offers have disappeared.

These practices, though permissible by law, could deliver you into the debt whirlpool. The $5,000 you borrowed could soon cost you $9,000 or more in interest payments over time. You may be able to make the minimum monthly payments but you are doing nothing to reduce the original amount borrowed. In effect, all that you are doing is paying enough money to cover your interest charges and not anything else.

So, how can you lower your interest rates?

Firstly, review your credit card statement to learn what the interest rate you are paying as the rate may have increased without notification. Contact your credit card provider and ask for a reduced rate. If they won't budge, find out if you can get another card where a fixed, lower rate is offered such as a zero percent balance transfer card. Just make certain that once you get the new card and your balance has been transferred over, give notice to the old credit card provider that you are canceling your financial credit.

Secondly, if you are unable to secure new credit or transfer your money to a lower paying credit card, you can start reducing your debt by paying off the smallest amount owed first. For example, if you have four credit card balances of $1,250, $3,440, $5,780 and $7,800, then make the minimum monthly payments on the last three cards, but make much larger payments on the first card - the one with the lowest balance. Once the first card is paid off, then start making larger payments on the second card until it is paid off, then the third and then finally the fourth card.

Before you know it you will be debt free, and out of the debt whirlpool once and for all!