Outside the box: lowering your payments |
By David Pilley on October 6, 2010
.jpg.aspx?width=75&height=75) You might not be aware of many of the things you can do to lower your monthly payments. If you think the amount is going to keep increasing, then you should know you can change that. You must be a proactive thinker, but you also must not try to do everything at once. Below is a list of actions you can take to have lower payments, and think about doing one or two.
Trade in your car. What does a car have to do with credit cards? Well, if you’re paying too much for gas and repairs to your vehicle, you might not have enough to lower the debt you already have in credit. If you’re renting, look for a car with a lower monthly payment. You must be on the lookout for lemons, of course, so this might not be the first option for lowering your credit card payments. If you find a deal, though, it will leave you with more money for you to temporarily pay more than the minimum payment for your credit card. Paying more than the minimum is a direct way to lower future payments.
Eliminate unnecessary fees. If you notice an annual fee on any of your cards, simply call the company and ask to have it removed. This is a fee you pay every year just for having the card, and most companies will remove it if you request it. If you get rid of the annual fee, then you will have a bit more cash to get rid of any late fees you may have. Also be aware of possible transaction fees that could occur if you use your credit card at an ATM.
Home equity loan. Be aware that this is a secured loan, with the equity of your home as collateral. If you’ve owned your home for a while, and you have made timely payments on your mortgage, the home’s equity has grown. You can take out a home equity loan to lower the current balance on your credit cards, but make sure you have a reliable source of income before doing so. It may be possible to get a tax deduction on the loan’s interest, so don’t forget to ask about this.
Find the lowest interest rate. Not all credit cards are the same. If you have multiple cards, there’s a good chance one has a lower interest rate than the others. You can consider consolidating all of your credit cards into that one card with the lowest rate. The current amount of debt is not going to drop, but your future debt will be less because of the lower interest rate, as long as you make your payments, of course.
Doing even just one of these things may lower the amount you have to pay to your credit card companies. There is no one right answer to lower your monthly payments. You certainly don’t have to do all of these things listed above, but doing nothing is the worst thing to do.
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