How Interest Rates Affect Your Payments
Interest rates are infamous for creating unmanageable monthly payments on your credit cards and loans. You may feel that you have no power to take control once the interest rate takes the reigns and starts snowballing. New Era Debt Solutions takes a look at these interest rates, how they affect your monthly payments, and what you can do to get them under control.
A Look at the Numbers
Depending on the type of card or loan you have, interest rates can be as low as 13.99% or as high as 29.99%. Bank and store credit cards are notorious for imposing high interest rates on consumers. Though many want to point the finger at lenders, it is up to the consumer to pay on time to avoid the interest rates. After all, lenders cannot hand out money for free otherwise they would be in debt! Value Penguin compares interest rates on credit cards and offers the specific numbers by bank and card type. The consequences of not paying on time demonstrate the potential dangers of using credit cards.
Taking Control of Payments
These high interest rates can greatly affect your monthly payments because they can become so high you may not able to easily pay them off within a few months or even a few years. They serve as a penalty because you didn’t pay back the money you initially borrowed. It may seem futile to pay your bill each month when the number continually grows. How can you be certain there is an end in sight? It is crucial to get ahead in your payments and try to tackle as much of the interest as you can while cutting back on using credit cards. Opt for cash or using your debit card to avoid letting your credit card balance get too high each month.
Repayment Plans
At the end of the day, we are all human and make mistakes. Sometimes companies and lenders can be understanding of this, but don’t bank on it. They may not be able to offer you some sort of deal, but you never know until you try. Get in touch with them to see if they have any sort of repayment plan that works for you. If not, then you should start looking at debt reduction options to reduce the amount you owe.
If you are working to repay your debt on your own, it is critical to save the smallest debts for last to overcome high interest rates. Tackling larger payments first with higher interest rates can save you money, rather than letting them grow even bigger while you pay off smaller accounts.
A Light at the End of the Tunnel
There are always options available to you when trying to pay off debt. You must remember that it is up to you to make a change. To avoid credit card debt and high interest rates in the future, remind yourself of the consequences that come with swiping a card that has borrowed money on it. It can be easy to mindlessly swipe your credit card each month and think you have enough money to pay for the bill when it arrives next month.
Remember what your goals are and how you can achieve them. Regularly consult your monthly spending plan and do not overspend to remain in a financially stable state. Also, consider what you use credit cards for. They are great tools to build credit, but don’t need to be used for every purchase. For instance, you may not need to put your weekly groceries on a credit card. Imagine having to pay interest on something that doesn’t last forever.
The road to financial freedom does exist. New Era Debt Solutions can take you there. Contact one of our friendly counselors for a free consultation today so you can start living debt free.