David Slade is a senior Post and Courier reporter. His work has been honored nationally by Society of Professional Journalists, American Society of Newspaper Editors, Scripps foundation and others. Reach him at 843-937-5552 or dslade@postandcourier.com

Consumer Borrowing (copy)

It pays to shop around for credit cards. File/AP

For the roughly 40 percent of U.S. households carrying credit card debt, double-digit interest charges are a constant drain on personal finances. But there are ways to slow that drain — or even plug it.

Naturally, step one is to stop adding to that debt. With the median interest rate hovering around 21 percent for credit card balances, that's a very expensive way to borrow.

Think of it this way: If you're carrying a balance on a credit card with a 21 percent interest rate, and you use that card to buy lunch, you just took out a high-interest loan to buy lunch.

Americans paid banks $104 billion in credit card interest and fees during the 12 months ending in March 2018, according to an analysis of federal data by MagnifyMoney, a LendingTree affiliate. Wow.

Step two is coming up with the best plan to pay off that credit card debt, and one good way to do that may sound counter-intuitive — signing up for another credit card.

Here's why: To make that debt go away, it has to be paid off, and the lower the interest rate the more the payments go to reducing the debt.

There are plenty of credit cards that allow new customers to transfer balances from other credit cards, and they charge no interest for an introductory period of time that's often 15 months. Using a balance transfer offer to methodically pay down credit card debt, while paying no interest, is a good plan.

“These can save you so much money," said Ted Rossman, industry analyst with CreditCards.com

Rossman and Matt Schulz, chief industry analyst at CompareCards.com, both mentioned two particular credit cards as top candidates for balance transfers. They are the Chase Slate Visa and the American Express Blue Cash Everyday cards.

Here's why they, and I, think those are good choices: Both have no annual fee, both offer zero interest for 15 months on transferred balances, and neither charges a fee to transfer a balance. Some cards charge up to 5 percent of the transferred amount, but may offer a longer zero-percent-interest time, such as 21 months with Citi Simplicity.

So let's say you are carrying a $5,000 balance on a credit card with a 21 percent interest rate, and you plan to pay that off in 15 months. With that credit card, you'd need to pay $400 each month, which would include $692 in interest over 15 months.

With a zero-interest deal, you could pay off that same balance, during the same period of time, for $333.33 each month. Of course, it's important to avoid new purchases.

We're starting a weekly newsletter about the business stories that are shaping Charleston and South Carolina. Get ahead with us - it's free.


Consumers can compare different credit card offers on many websites including CompareCards, CreditCards, NerdWallet, and creditkarma.

Paying off a balance, while avoiding new high-interest debt, does take discipline, and getting a good balance transfer deal requires a reasonably good credit score.

“If you have a 700 credit score, you can probably get most of these cards," said Schulz. "If you dip much below that, you may have some issues."

Credit scores, also called FICO scores, range from 300 to 850, and "good" is generally 690 or better. If you don't know your score, you can find out at no cost on websites including creditkarma.com. You can also, at no cost, get copies of your credit reports from annualcreditreport.com to make sure there are no mistakes that could be harming your creditworthiness.

If you don't want to sign up for another credit card, or don't have the credit to qualify, then at least do this: Call the toll-free number on the back of your credit card and ask them to lower your interest rate. Do likewise if you are paying an annual fee, or if you get hit with a late-payment fee.

“People would be very surprised how often cardholders get their way, when it comes to things they ask for – late payment fee (waivers), annual fees, and even interest rates," said Schulz.

Reach David Slade at 843-937-5552. Follow him on Twitter @DSladeNews.