Copyright 2006 Andrew Saari

According to cardweb.com, the average American family owes over $8,000 in credit card debt. This can lead to thousands of dollars in interest paid each year to credit card companies.

One strategy for lowering interest payments is to transferring credit card balances to a lower interest rate. If you had $8,000 in credit card debt, and you made a minimum monthly payment of 2% with an 18% APR, it would take you 647 months to pay it off, and you would have paid $22,931 in interest. If you lower the rate to 10% APR on that same balance of $8,000, and make the minimum monthly payment of 2%, you would pay the balance off in 302 months, with total interest paid being $5,506.63, and a total savings of over $17,000. But, if you were to transfer that $8,000 balance to a 0% APR, you would have the balance paid off in only 188 months, and save yourself $22,931! You'd be saving enough for a new car!

Here are a few things to consider when transferring your balances:

* Credit card companies usually offer that introductory 0% APR for a limited time. You'll need to find out for how long, and what the terms are.

* It may be benefical to call your current credit card company, and try to negotiate a lower rate. Credit card companies are very competitive, and will want to keep your business.

* Sometimes there are balance transfer fees. These fees are often between 1 and 2%.

* After you've transferred balances on those cards, you'll want to close those accounts. You don't want to accumulate a balance with a high interest rate again.

Department store credit cards need to be considered, too. It may be enticing to get that extra discount on your purchase for starting an account with the store, but you may be in for a rude awakening when you get your bill! Chances are you're paying 18 and 22% on those balances. Some can even be as high as 30%! If you have department store credit cards, you'll want to pay these off as quickly as possible, or transfer those balances to a major charge card with a lower rate. And, don't forget, you'll want to close out those accounts, too.

Checking your credit report yearly is a good idea, as well. Inaccurate information about your credit history can make or break your financial future. It's your report, and you should know what lenders know about your financial history. You'll want to examine your report for accounts that aren't yours, or old accounts that have not been in use, and need to be closed. If you're not paying attention, who will?

Credit card companies are extremely competitive. With little effort on your part, you can reduce or even eliminate your interest payments. The money you're going to save may even be enough to purchase a new car, or your dream vacation. Or, you may consider adding to a savings account with your new found wealth.