Is There a Credit Card That Will Give Me Rewards To Pay Off a Big Balance?

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Welcome to Ask Clark, a column designed to answer your financial questions, by money expert Clark Howard.

To Pay Off My Credit Card Balance, What Reward Cards Would You Recommend?

Georgia in Connecticut: “I have a hefty balance on a credit card. I just want to know if there’s a credit card that I could apply for that would give me rewards to pay off that balance.”

Clark’s Take on Getting Credit Card Rewards When You Have a Big Balance

Clark says: “Don’t worry at all about the rewards.” He says what you should worry about is the interest rate you’re paying on that balance.

“No rewards, effectively are going to be valued by any significant amount compared to the interest rates that you’re playing with when you’re paying a balance on a card,” Clark says.

Here are four options that Clark recommends you take if you’re trying to pay off credit card debt.

1. Apply for a Balance Transfer Card

You may find that it will benefit you to get a balance transfer card, “one where you might pay a fee upfront but in return you will have a very low or zero interest rate for a period of 12 to 18 months,” Clark says.

Here are the best balance transfer credit cards.

2. Get a Credit Union Card

Credit union cards typically carry an interest rate that is several times lower than bank-issued credit cards, Clark says.

Here are some other great things to know about credit unions.

3. Negotiate a Lower Interest Rate

You also have the option of negotiating a potentially lower interest rate with your current issuer. Clark says: “Tell them you’re going to transfer the balance of this other card that offered you a better rate. Ask them if they can lower your rate or otherwise you’re leaving. And they may in turn lower your interest rate.”

Here’s how to lower your credit card interest rate.


4. Try a Personal Loan Lender

Ather alternative is to look at converting your credit card debt into what used to be known as a “peer-to-peer loan.” There are several online platforms that facilitate making personal loans. Some top lenders that offer debt consolidation are:

“With somebody like Prosper, Lending Club or even SoFi, you move that balance over into a fixed rate that must be paid off over a set term of 24 or 60 months,” Clark says.

Want to reduce your debt with a credit card balance transfer? Here’s a step-by-step guide.

To hear Clark’s full take on this question, listen to the segment:

Do you have a question for Clark? Use this form to ask him! And remember that you can listen to the Clark Howard Podcast at any time here.

If you have a question but don’t want to go on-air, contact Clark’s Consumer Action Center for free money help.

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