With a credit card, if you’re unable to clear your statement balance before the due date, it will be carried forward, and you’ll have an interest amount slapped on top of the actual amount. Before long, you’ll have a much higher amount than you started with, and your interest will start accumulating.

One way to deal with this problem is to start a line of credit to pay off the debt on your credit card. Typically, a line of credit has a much lower interest rate (around 4% to 10%) than a credit card’s 19.99%. Using this tool effectively can help you lower your interest payments and paying off your debt much faster.

Keep reading to learn all about how a line of credit can be used efficiently to pay off credit card debt.

Check Your Eligibility for Line of Credit

Before anything else, you first need to check whether you’re eligible for a line of credit. Here are some of the requirements that lenders typically look for:

• Good credit score (usually more than 660).
• Minimal household income requirement of about $35,000 (the amount may be higher for some lenders).
• Collateral (in case of secured line of credit).

In addition to this, you may have a more difficult time securing a line of credit with a low-interest rate if you have a history of poor financial management. Maxed-out credit, high levels of existing credit card payments, high debt-to-income ratio, and low credit scores will all work against you in this case.

Practice Financial Discipline

If you get a line of credit to pay off your credit card debt, the last thing you’ll need is to accumulate more debt. This is why it’s absolutely important to practice financial discipline to manage your debt effectively. Here are some things to remember when getting a line of credit:

• This is not an opportunity to increase your spending.
• You should always make your monthly payments on time.
• Don’t take a mortgage or personal loan until your credit card is completely paid off.

Consider Alternatives to Line of Credit

If you feel that a line of credit is not the best option for you or that it may increase your debt, you should consider alternatives to this option. In this case, the first thing to do is to speak to your creditor and explain your situation to them. They may help you in one of the following ways:

• Set up a doable payment plan for you.
• Temporarily lower your interest rates.
• Give you a balance transfer credit card.

If you’re looking for a reliable balance transfer credit card, start by comparing all the major credit cards in Canada using Great Canadian Rebates. Our online platform lets you compare the APR on different credit cards, and you can easily apply for one that meets all your requirements.

If you apply through our platform, you can also enjoy cash back on the credit cards once your application is approved. Visit our website to learn all about impressive credit card rebates in Canada.