Consolidating Debt with a Low-Rate Credit Card

Paying off debts to multiple different creditors or dealing with high-interest debts with varying monthly payments can be extremely stressful. As interest continues to accrue over time, you could end up paying a lot more than you owe. Debt consolidation is one strategy you can use to help you pay less on high-interest debts and get out of debt faster. 

There are a variety of ways that you can consolidate debt into single payments with a lower interest rate, such as getting a low-rate credit card. Low-rate credit cards are simply normal credit cards with a lower interest rate than most credit cards that can be used to consolidate higher-interest debt so that you pay less in interest as you pay off your debt.

Arkansas Federal Credit Union (AFCU) offers a low-rate credit card with no annual fee and one of the lowest rates in the country. You can open a low-rate credit card online today or visit one of our local branches to apply in person.  

What Is a Low-Rate Credit Card?

A low-rate credit card is a credit card with an interest rate that is lower than the average credit card. Using a low-rate credit card can make it easier for you to pay off your debt faster because you will accrue a lower amount of interest each month so that you can pay more on the principal every month.

Many credit cards come with interest-free periods, which may seem like a good option for combining debt. However, a low-rate credit card may be a better option in the long term. With some credit cards, the interest-free period will end, and you could end up paying a higher interest rate. A low-rate credit card guarantees that you will always be able to keep a lower-interest rate. 

How Can You Use a Low-Rate Credit Card for Debt Consolidation?

If you have debt on other credit cards with higher interest rates or other high-interest debt, there are a few different ways you can choose to consolidate your debt. One way is with a low-rate credit card. You can use a low-rate credit card to pay off your high-interest debt, and with your debts combined on your low-interest credit card, you can pay off your debts with a single payment and a lower interest rate. 

Using a low-rate credit card for debt consolidation can help you improve your credit score. With a low-rate credit card, if you can make consistent payments to decrease your debt, this will also help you build a positive payment history which can help improve your credit score. Paying off your debts can also help reduce your credit utilization ratio, which is the amount of credit that you have in use. The less of your available credit that you use, the better your credit.

Advantages of Using Low-Rate Credit Cards for Debt Consolidation

Dealing with a lot of debt from different sources can be time-consuming. Keeping track of your different debts, when payments are due, and the various amounts can be difficult and stressful. It’s easy to miss a payment and add extra fees to your debt while hurting your credit score. Credit card consolidation of your debt can allow you to streamline all of your payments, so you only have to keep track of one payment to pay off all your debts. 

Using low-rate credit to consolidate your debt can help you save money throughout the life of your loan. Consolidating your debt to a single credit card allows you to pay off your higher-interest debt quickly, avoiding those high-interest payments and only paying the lower interest rate of your low-rate credit card. 

AFCU’s low-rate credit card has one of the lowest rates in the country, plus it comes with no annual fee and no over-limit fee. This makes it a good option for paying off debt because your interest rate will be low, and you can consolidate all your debt without worrying about high interest rates.

Things to Consider Before Opening a Low-Rate Credit Card

Consolidating debt can be important if you’re dealing with high-interest debt, especially if you have debt in different places. Still, you should consider a few important things before choosing your debt consolidation option.

Using a low-rate credit card to consolidate debt is opening another line of credit. This means that you’ll have to be careful not to overspend and go into more debt instead of paying off your debt. If you’re worried about your spending and think you might not be able to use the low-rate credit card to just pay off your existing debts, it may be a good idea to consider other debt consolidation options, such as a home equity loan or personal loan. 

Before taking out a loan or opening another line of credit to consolidate your debt, it’s a good idea to find the best option for you. Low-rate credit cards can have higher interest rates when compared to other debt consolidation options. It’s a good idea to look into all of your possible debt consolidation options before choosing what is best for you and your specific situation.

Apply for a Low-Rate Credit Card Today

Getting a low-rate credit card may be a good option if you have a lot of high-interest debt that you are struggling to keep track of and want to reduce your total payments towards your debt. You can consolidate higher-interest debt into one payment with a low-rate credit card. 

We have an easy application process for our low-rate credit cards. You can quickly apply online today and get access to the benefits of a low-rate credit card soon. 
If you are interested in a low-rate credit card with Arkansas Federal, you can apply online, visit one of our local branches, or call us at (800) 456-3000 to get started.