If you follow your credit card statements closely, you’ll notice that many credit card companies have been protecting themselves by raising interest rates and charging higher fees for late-payments as well as reducing credit lines, sometimes they are revoked altogether. Many interest rates are now as high as 25%. Of course, like many people, these changes can sneak past us. What do we do if credit card bills get out of hand? How can we lower our bills?

First, try to meet your minimum payment each month, in fact, most suggest to pay as much as you can towards the one with the highest interest rate. I set an automatic payment with my online bank so as not to worry about accidentally missing the due date. Plus you can always alter it up or down depending on your circumstances that month.

There is some wisdom, like that suggested by Suzie Orman, who says in these difficult times if you’re are seriously strapped for money, only pay the minimum amount due so you keep the cash on hand for emergencies or other expenses. If I had a choice between paying the mortgage or paying a credit card, I’d keep the roof over my head, thank you very much! (And maybe disconnect the phone to quiet the creditors ringing)

Think about moving some of your credit card debts to new accounts with lower interest rates. (Fun Fact: This will also punish the high-interest banks, which gives you a bit of satisfaction.) Moving a balance to a credit card with a 0% introductory rate for 6-12 months can help you save a lot on interest. Just be sure to keep each of your credit card balances below 35% of the credit limits to avoid damaging your credit score. And be sure to always pay on time (again, use the automated system) so as not to assess any penalties for late payments.

You should contact your creditors and lenders to see if you can improve the terms on your debts. Easy to say, but sometimes difficult to do. Here are some suggestions to get you started. Some of these may work depending on who you’re dealing with; other banks may not budge:

  • Call each bank and speak to their customer service department to see if they’re willing to lower your interest rates or negotiate a reduced settlement on some debts. If you’ve been paying on time, they should be willing. If you haven’t, it’s still worth a try.
  • Ask the bank to waive any fees, like ATM fees or convenience checks fees.
  • Ask about setting up a payment plan that would be affordable to you.
  • Offer a lump sum settlement of 25% of the total owed. If you’re facing serious financial problems (like bankruptcy), the banks may want to at least get some money. Be upfront.
  • Be sure to get all approvals that you negotiate in writing! Very important.

Negotiating your debt can save you lots of money. See for yourself with this Debt Calculator from Keep changing the interest rate to see how successful your negotiations are.

When you reach major milestones, be sure to celebrate your success. PS: Just don’t spend a lot of money doing it.