Everybody knows that interest rates are as low as they have been in a very long time. The low interest rate environment is causing a lot of pain for people that own bonds and savings accounts because the payouts are so long. You would barely get over 3% on a 10 year government Treasury bond right now. A savings account has rates that are well below 1%. This is bad news for people that are looking to earn higher returns on their money but it is good news to people with debt.
Right now is one of the best times that you can ever think of for getting out of debt. Lower interest rates mean that the amount of interest that you will have to pay monthly is getting lower. It is possible right now for people with good credit to get 0% interest rates. People with average credit can even get rates in the single digits. If your credit is bad then your interest rate will be high but not as high as it would have been a few years ago.
That is why this is the time to get out of debt. You should use this low interest rate environment to reduce your debt. You can do this by transferring your higher balances to a card with a much lower balance. This way you are still repaying the same amount of principal but reducing the amount of interest that you have to pay. You could save yourself thousands of dollars depending upon the debt load that you are carrying.
Another strategy is to use the low interest rate environment to petition your credit card company to lower your rate. If your current interest rate is 17% and you know that a competing credit card company has a lower rate, you can use this as leverage against your current credit card company. Let your credit card company know that you can get a 10% rate from another company. Either they will lower your rate or you will take your business elsewhere. You might be surprised to find that your credit card company will lower your rate to keep you as a customer.
It costs companies a whole lot more money in marketing and advertising to attract a new customer then it does to keep an existing customer. Use this power that you have to your advantage.
