Reader Tip: Reduce Credit Card Interest Payments With Micro-banks

Reader Wandering Indian Monk wrote us in, linking to a little tip he wrote on his blog about how you might be able to reduce the interest you are paying on your credit card debt.

Essentially, his idea is that you borrow the money you need to pay off your debt from a micro-bank. These are sites like Prosper that allow people in the network to lend money to other individuals

Since the interest rates on these people-to-people loans is relatively low, maybe 10%, you could significantly reduce your interest payments by shifting the loan to a gaggle of Internet strangers!

We have no idea if this would work and the entire micro-bank concept seems a bit shady to us. But you’re probably safer borrowing than lending. If your credit rating is being ruined by a 20% interest rate that prevents you from ever digging yourself out of your financial hole, you might consider it. If you do, or have any experience with micro-banks, let us know. We’re intrigued, at least, with the concept.

What Options do you have with your Money? [Wandering Indian Monk]