Unless you have the cash or savings to pay your credit card balance off entirely, you may need to think about refinancing. Because credit cards are unsecured loans, meaning there is no collateral securing the loan (like a car), finding a lender to approve this new unsecured debt may be challenging. Additionally, unsecured loan rates tend to be somewhat high compared to other options that may be available to you.
Do You Own Your Auto Free & Clear?
If so, ask your credit union or bank about doing a clear title loan to pay off your credit card debt. It may seem crazy to take out a car loan after you worked so hard to pay it off, but look at it this way – your credit card rate is likely upwards of 15% APR, but a car loan could be as low as 4% APR (or even lower, depending on your credit score). By turning your credit card debt into a car loan and making the same payment every month, more money is going to principal, and therefore you’ll get rid of the balance MUCH faster than keeping it on the credit card.
Are You A Homeowner?
If so, you have even more financing options available to you, such as a home equity loan or line of credit. Equity loans offer the lowest rates available, but they can take several weeks to fund, and they require a lien on your home. If saving money is the name of the game, this is your best option. If you need the funds quickly or don’t qualify for an equity loan, Amplify also offers a Homeowners Express Loan that has lower rates than most credit cards.
If you don’t have collateral to secure the loan against, talk to your bank or credit union about ways to tackle your balances the old fashioned way. There are countless strategies and philosophies you can research and adopt to fit your situation. The most important part of lowering your credit card balances is self-discipline. You must be able to stick to your payoff plan and commit to not adding additional money to the balance.