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Vacations are great, but it’s all too easy to go a bit crazy and spend more than you intended on a credit card. The fancy restaurant you enjoyed on the last night, that gorgeous leather handbag you spotted in a boutique, and the upgrade to a sea view hotel room that seemed too good to miss – all these things add up. By the time you return home with a suntan, a huge credit card bill isn’t too far behind.

With Christmas not too far away, the last thing you need is a hefty credit card bill weighing you down. After all, you will probably be adding more purchases to it before long. So how can you clear your credit bill without paying too much interest? Let’s find out!

Balance Transfer Cards

The most sensible thing is not to accrue a large balance, but if you blew your budget on vacation, the fastest – and cheapest – way to clear the balance is by switching the debt to a cheaper card. Balance transfer cards offer 0% introductory rates for balances switched from different credit cards. This gives you time to pay off your balance without incurring hefty interest charges.

Look around for the best balance transfer deals. Bankrate has a glut of offers, so check them out and read the small print before you apply. It’s very important that you look at the terms and conditions of a credit card balance transfer deal.

Some lenders offer long interest-free periods but charge a fee for transferring a balance, whereas others don’t charge a fee but the interest-free period is shorter. Work out which card is best for you based on the fees and how long you need to pay off the balance. If you need longer, you might have to pay a 3% balance transfer fee, but bear in mind that paying interest on a $5,000 balance after 12-months will hurt your pocket.

Another point you need to consider is your current credit rating. Banks determine credit card interest rates based on a customer’s credit rating. If your credit score is “fair” there are deals for you, but if you have a poor credit score, you may struggle to find a lender willing to give you a balance transfer deal.

Debt Consolidation

Interest-free balance transfer deals are the cheapest way to clear a credit card debt, but if you can’t find a deal that suits your credit rating or you need longer than 21-months to pay off the debt, look at taking out a debt consolidation loan.

Credit cards charge around 18% APR, but if you have poor credit, the APR will be a lot higher. A personal loan isn’t free, but it’s likely to be cheaper than a credit card and you can make repayments for up to 60-months. This is an option worth considering if you have several credit cards, a car loan, and maybe personal loans too.

Speak to a debt counselor if your debt burden is getting out of control.

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