(InvestigateTV) — Bankrate found the average credit card interest rate today is 20.27%, making it very expensive to carry credit card debt.
Sara Rathner with NerdWallet said those carrying a lot of credit card debt may want to consider debt consolidation.
She said those with good credit could qualify for a balance transfer card. This would allow them to move debt to a card with no interest for a period of time.
There are two things consumers need to understand about the balance transfer process, Rathner said.
“One is that you’ll owe typically a balance transfer fee three to five percent of the balance you transfer so you’ll want to keep that in mind,” she explained. “And the other thing is, once that no interest promotion period is over, the credit card interest rate will return to its standard level, so if you have any remaining debt on the card, you’re going to start owing interest on it.”
Rathner said debtors could also try a personal loan. It won’t be zero percent interest, but it could be a lower interest rate than their credit cards.
Another option to refinance debt is a home equity line of credit.
“As important as your own home, because if you’re in a situation where you can’t make payments, suddenly you’re putting your home at risk,” Rathner cautioned. “So, that is something that could be worthwhile but it’s also a thing to enter into very carefully.”
There’s always the option of turning to nonprofit credit counseling agencies that can help people manage debt and create a plan to pay it off.
Rathner said there is no shame in asking for help to get credit card debt under control.
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