Debt sucks. It always sucks to owe something to somebody – anybody – because then you are beholden to them. In short, they own you. But it really sucks when it is a bank that owns you.

More importantly, it sucks to pay interest on your debt. Every dollar you pay the credit card issuer on interest is another dollar not available to buy more decorative plates or to renovate your bathroom again. Or to do whatever you like most with your extra hundreds of dollars.

Yes, credit card interest is often quite substantial. If you debt gets away from you, you might be paying several thousand dollars every year in interest. That can add up to a lot of decorative plates.

The best way to reduce those interest payments is to reduce the debt itself – to pay off the principal in full. But that usually takes time, and it is easier said than done. So there here are a few things you can do in the meantime to reduce the interest you have to pay.

The first step is to know exactly where you stand. Review your most recent statement and find out what you are paying now, what your interest rate is set at. Yes, I know – too much.

The second step is to play detective. Knowledge is power. Go to your credit card company’s website and find out what interest rate they offer to new customers. Make notes.

The third step is to go to a few other credit card issuer websites and find out what interest rate they offer to new customers (like what they would offer you to switch to their credit card, hint. hint). It might help to put all this information into a spreadsheet:

Current rate you are now paying

Your issuer’s offer to new card holders

Other issuer’s offer to new card holders

The fourth step is to call your credit card company. Just tell the customer service person that you would like a better rate. You will probably find that you have to ask to speak to someone who CAN make that decision, but make sure to be polite and calm all the way through.

Credit card companies know that you have a choice in a competitive market. You need to gently let the decision-maker know that you know this, too. Tell him about your spreadsheet, and how you need to reduce your interest rate.

The fifth step is to ask for the lowest rate. You won’t likely get that rate, of course, and the issuer will have all sorts of reasons. But the lower you ask, the lower you will get.

There might be one wrinkle – your credit score.

Before offering a new rate, the company will check your credit score. And that might get you a better rate. Or, they might tell you that your credit score sucks more than debt. If so, thank them politely and get a-hold of your full credit report. Go over the report with a fine tooth comb. Is everything accurate? Is anything outdated? If there is any way to improve your credit report, do so.

The sixth step is to call your credit card issuer back with your improved credit score and ask again (this time probably to a different person) for a better rate. Be patient, if you have to start over.

The seventh step is to switch credit card issuers. You will only need this if all the other steps have failed. You have done the research. You know what they are offering. Pick the best deal. If you can get zero interest for six months or more, grab it. You have six months to implement step eight.

Which is…

Pay down the principal. Yes, your new, lower interest rate (hopefully zero percent for the first six or twelve months) is a windfall. If you were paying $3000 per year in interest, that is $250 per month. Over the next six months, that means there is $1500 of interest that you would have been paying in interest that you now do not have to pay.

Do not invest this new $1500 (or however much it is for you) in decorative plates, no matter how much you like them. Invest it in paying down $1500 of debt. Yes, any reduction in interest rate should be used to pay down the principle so that you never have to pay interest again.

Drew Cassels is a writer for Credit Cards Canada, which provides objective reviews of the various Canadian low interest credit cards available.

Drew Cassels is a writer for http://www.creditcardscanada.ca , which provides objective reviews of the various Canadian low interest credit cards available: http://www.creditcardscanada.ca/categories/low-interest

Author Bio: Drew Cassels is a writer for Credit Cards Canada, which provides objective reviews of the various Canadian low interest credit cards available.

Category: Finances
Keywords: interest,credit,credit cards,interest rate