STEP 4: Debt Reduction Solutions
Action 4: Beware of Teaser Offers

Some debt reduction solutions are just plain simple - like our advice to always "read the fine print".

Most of us get lots of mail from credit card companies offering extremely low interest rates, sometimes actually "zero percent" credit cards. The zero interest offer can be for a set period of time, usually around 6 months but sometimes up to 24 months. Or it can be offered on all of the debt that you move to that card from other companies. Either way, it is vitally important to always read the fine print.

These "teaser offers" always come with a catch and the credit companies are required by law to tell you what the catch is. And they do - usually in very tiny print. The catch is often that any unpaid balance reverts to a much higher interest rate, often as high as 20%, after the stated low interest term is up. The double whammy is that if you are late, even by a little bit, the late fees can be hefty too. Or your interest rate can jump significantly with each late payment. The debt sitting on your "zero interest" credit card can now be creating debt at up to 29% or 30% interest.

Our Debt Reduction Solutions for Teaser Offers:

1. Always read the fine print on any legal document before you agree to it. The paperwork that comes with a new credit card is a legal document that binds you to the terms they outline.

2. Check to make sure you are aware of any other charges that come with the offer. Many companies that offer enticing rates to consolidate your debt on to their low interest rate cards will charge you a fee of 1% to 3% of the amount you are transferring. Do the math and make sure it is worth it.

You will find more creative payment and debt reduction solutions here.