You have opened your recent credit card statement and thought that just before you ripped the envelope open you could hear a drum roll.  Yes, you were perhaps a day or two late on a few of the payments, and now the credit card company has exercised its option to raise your rate. You may be looking at a whopping twenty-five percent interest rate, and if your balance is right around $10,000, your finance charges are sure adding up.  Add to this the late fees, and an assortment of other fees and charges, and it appears like you are going backwards every month, instead of forwards.

Perhaps you have decided to consolidate your debt.  This is a great idea, and the goal is to do so at a lower interest rate.  Yet maybe you have decided to go ahead and consolidate your credit card debts onto another credit card, which has a lower interest rate.  This is commonly referred to as playing the transfer balance game when consolidating debts. 

Depending on your creditworthiness, you probably receive offers for zero percent interest credit cards.  These cards will have a low introductory rate for a few months, and then the interest rate will go up to its normal rate.  The goal is to get out from under the thumb of those high interest rates and move balances over to a card with a low interest rate.

There are a number of ways to go about accomplishing this.  If you have not yet maxed out all of your credit cards, you may want to go ahead and call your creditor to see if they will give you a preferred rate on a balance transfer.  Oftentimes your credit card company will agree to this since this means that there is a good chance that you may not pay off the balance before the rate reverts to the normal interest rate.  Since all this can be accomplished by a quick and oftentimes free phone call, it is worth the effort to do so.

If your credit cards are maxed out, or if your credit card company does not want to work with you, you may have to go ahead and apply for a new credit card.  Watch your mail for the infamous zero interest rates offers. These teaser rates may sometimes only last for one month, or sometimes they may last as long as three or six months.  Be sure to read the fine print before applying and transferring a balance!  Will you be able to live with the regular interest rate once the teaser rate has elapsed?

To make sure that you are comparing apples to apples when shopping around for your new credit card, make sure that you read the fine print diligently.  You will want to find out if the balance transfer falls under the low teaser rate, or if instead it will be treated as a cash advance, which usually is accompanied by stiff fees and a slightly higher percentage rate.  Make sure that you still come out ahead! If the wording is a bit murky, or you are not complete sure what the fees will be, go ahead and call the credit card company and ask them to send you their policies on cash advances and balance transfers.  Oftentimes these disclosures will also be available on the card company’s website.

Those who have mastered the transfer balance game - and elevated it to an art form – suggest taking advantage of the grace period.  Usually there is a twenty-five day grace period on outstanding balances.  If the balance is not paid in full at that point, you will incur an interest charge.  If you have two or three credit cards with good deals on balance transfers, you should be able to transfer the same balance round and round without incurring interest or making a payment.

Of course, this will only work in the very short term.  For a long-term solution, resolve to stop using your credit cards, and pay more than just the bare minimum.  Instead, pay the amounts of any charges you made during that month plus interest charged plus a bit of the principal to reduce your overall debt.