A lot of consumers get into all sorts of financial troubles due their failure to properly manage their credit load. At times, we get confounded by all the things that we have to do to avoid debt traps, debt cycles and bankruptcies. We hear experts advising us that we steer clear of high APRs since these are bad for our finances. Does this mean that we should do away with credit card debts and payday loans altogether?

Proper management of our credit load is not really a complex undertaking. You don’t have to be an expert in personal finance or an accountant to be able to untangle the knots of your credit portfolio. You only need to look at your primary objective, which is to reduce your credit balance.

When we make our debt payments, we are actually doing two things. We are paying the interest as well as the loan principal. Logic dictates that we must make sure that we are able to cut down on the loan principal when we are making debt payments in order for us to reduce our credit load. If your payment is only covering the interest portion then you are not actually reducing your debt.

One way to reduce your credit load is by reducing the interest. By doing so, you increase the portion of your debt payment that is used to pay down the loan principal. This will help you get out debt a lot faster, while giving you the opportunity to save your money. However, most credit companies would only allow about 3 percent to 4 percent reduction on the interest rates. This may not be enough to make a substantial dent on your credit balance. Thus, instead of going for interest rate reduction, you may explore the possibility of a balance transfer.

Balance transfer is the financial option that involves the transfer of your balance on an existing debt, which is usually a credit card to another credit card that offers a lower interest rate. There are now credit cards that are offering 1.99 percent to 3.99 percent for balance transfers. The great thing about this balance transfer is that you can get 0 percent on such financial transaction.

Before you go for balance transfer, you have to make sure that you are in a position to accelerate your debt payments. Most banks balance transfers normally run for 12 months or even less. It is during such period that you get to enjoy the low rates and after which the regular rates will be applied on your loan. You must also have a clear credit card to accommodate this additional load. Suffice it to say, you need to manage your expenses to ensure that you don’t incur more debts after you have made the balance transfer.