Consider the 0% Transfer Deals. The standard credit card today carries an annual percentage rate of around 13%, according to Bankrate.com. That's more than double the rate on most auto loans and sometimes triple student-loan rates. This "bad debt" should be the top priority to pay off.
Consumers can take advantage of "introductory" offers from creditors and switch cards until the balance is paid off. For instance, many cards now offer 0% interest on balance transfers. You transfer a balance from another card and pay no interest on it for a year or longer. Once the offer ends, you can change cards again.
One caution: Some banks attach transfer fees of up to $50, so read the fine print. Also, these cards can carry high annual percentage rates on new purchases. When you try to pay new charges off, the payment might be subtracted from the balance costing you 0% rather than from the high interest balance. Usually it is better to keep just the transferred balance on these cards and use a different low-rate card for purchases.
Also, think about negotiating with creditors for better rates and waived fees, Scott Bilker, author of "Talk Your Way Out of Credit Card Debt," says consumers can save money simply by calling the creditor and demanding better rates. His strategy involves keeping open several lines of credit, switching cards regularly and transferring balances to flex financial muscle.
"The only way you can really make them feel pain is to transfer your balance," Mr. Bilker says. Every bank should waive at least one late fee if you request it, he adds. "If they don't do that, I'd leave."
Also consider consolidating your credit-card debt on to one or two cards. Many department-store cards carry APRs above 20%. Call the creditor and see if you can lower your rate, or consider transferring the debt to a lower-rate bank card.
If a bad credit score (yes, creditors keep score) is disqualifying you for credit, improve it by paying bills on time and reducing debt. Scorewise, it's better to have several credit lines with ample available credit than a couple of maxed-out cards. So don't rush to close out old cards.
