Low Rate Credit Card to Pay Off Credit Card Debt

Card users can transfer their credit card debt to a permanent low rate credit card. This is different from a credit card that offers a low rate for an introductory period, which usually lasts between 3-12 months.

Card users are advised to use a “snowballing” strategy with their low rate credit card. Snowballing involves card users first paying a higher interest credit card and then working their way down to lesser expensive cards. This method is very effective since most of the payments go to reducing the balance instead of the compounded interest.

There are credit implications for using the traditional balance transfer to move debt from a higher rate card to a lower rate card. Such transfers will show up on a credit report and could lead a future creditor to decline a line of credit.

Users can employ low rate cards in other less noticeable capacities. They can make daily essential purchases with their low rate cards to free up funds and devote the majority of their pay cheque to making bigger payments on the higher interest card. This technique is virtually untraceable by any lender or analyst. Alternatively, card holders can make large repayments on their low rate credit cards to increase the available credit and use the low rate card to make a large payment on the higher rate card. Both methods are very effective and permit card holders to trade a high interest rate for a lower one.