Credit Card Debt Relief

More people than ever are finding themselves saddled with more debt than they can handle. Credit card debt is particularly troublesome because the rates are often much higher than other types of debt such as auto loans or mortgages.

Here are 4 steps you can take to get some credit card debt relief.

1. Always make credit card payments on time. Most people already know that making a few late payments can lead to a hike in the interest rate. But did you know that credit card companies can also hike your rate if you pay late for another creditor?

It's true. The financial institution that holds your account is constantly checking your credit report. If they start to see late payments to other creditors, they can use it as an excuse to jack your rate up even if you always paid them on time.

For example, if you paid your American Express bill late for a few months not only would that interest rate go up, but the interest rates on your Visa and Mastercard accounts could increase as well.

2. Call and ask for a lower rate. The credit card industry is highly competitive and banks would rather lower your rate by a couple of percentage points than lose your business altogether. It's a smart move by them because they can still make a profit from you while keeping business away from competitors.

Just call the number on the back of your credit card and ask them to lower your interest rate. You may have to speak to a manager but they will almost always agree to shave at least a point or two off the rate.

Do the same for every card in your wallet. If you have several cards with balances, you could save hundreds of dollars per year in finance charges.

3. Transfer balances to a card with a lower rate. Credit card issuers flood the mail with all sorts of special offers for cards with super-low introductory rates if you transfer your balance to them. I have seen some that offered zero-percent interest for 15 months.

That translates to hundreds of dollars saved for the average consumer. Just remember to pay off as much as you can each month to pay down the balance before the introductory period ends and the interest rate kicks in.

4. Pay off credit card debt with a home-equity loan. If you own a home and have a good amount of equity in it you may want to consider taking out a home-equity loan or line of credit. Interest rates for home-equity loans are generally far lower than other types of debt, especially credit cards.

You can take out the loan, pay off the high-interest credit cards and pay just one low bill per month. Once again the savings can get up into the hundreds of dollars, if not more.

My father-in-law recently did exactly that and it has worked out great for him. He took out $15,000 over 10 years to pay off his high-rate credit cards and it only costs him about $160 per month. And since he doesn't have any more credit card debt to worry about he has been able to pay extra towards the principal each month, which will allow him to pay off the loan early.

An added benefit is that interest paid on home-equity loans is usually tax-deductible if you itemize deductions on your tax return. This can lower your tax bill at the end of the year, adding even more savings!

But the key is to not let the credit card balances get out of control again. If that happens you'll be right back at square one.

In summary, credit card debt relief is a major concern for millions of consumers. It is easy to get in over your head and owe more than you can afford. But there are ways to combat debt. The 4 suggestions I just gave you can save you hundreds, maybe even thousands, of dollars each year. Follow them and you too will be living credit card debt free.