Saving money for your cash reserve can start with lowering the interest rate on your credit card so you don't have quite so much to pay back. Don't rush to find a new credit card company though; you may be able to negotiate with your current credit card for a lower interest rate. Let's take a look at some startling statistics.

About 43% of American families spend more than they earn each month and even more put purchases on credit because they can. An average household carries about $8,000 in credit card debt. The average interest rate on credit cards is 10.70% annually. That means, if you are one of the average American families, you are paying $856 in interest annually, or $71 a month, on your credit card. On average, it takes a consumer 30 years to pay off an $8000 balance, especially if they are only making the minimum payment. If you think about it, that means they are paying around $25,000 in interest over thirty years, just to borrow $8,000, even if they are able to pay down their principle. Remember, for most consumers the average $8,000 debt is a revolving debt, which means even though they are making payments, they are spending just as much as they are paying off.

If you could eliminate your credit card debt altogether, that would be a fabulous input into you cash reserve, but let's be realistic. It's going to take some time to pay off your credit card debt, so it's time to negotiate with your credit card company for a lower rate of interest so you have a little something to put into your cash reserve now.

The first step to lowering your interest rate is to call your credit card company. Your credit card company is not going to call you with an offer of a lower interest rate. Most consumers don't call to find out if negotiating rates is possible, so they never know. On average, of those who call their credit card company asking for a lower interest rate, 56% are successful. Those who are most successful at lowering their interest rate are those who have a good payment history, and who have been with their credit card company for about four years. But even if you haven't been with your credit card company for a while, it's still worth a shot to give them a call and see what they can do for you.

Most people who are able to negotiate a lower interest rate are able to get at least 6% taken off. If you are paying 16% interest each month on $8,000, that's around $106 just in interest. If you lower your interest rate to 10%, you would be paying around $66 in interest each month, which gives you $40 a month to put into your cash reserve.

Take a look at how much you are paying in finance charges right now on your credit card debt then call you credit card company and negotiate a lower interest rate. The next time your bill comes, take a look at the finance charges and put the difference in your cash reserve. Do that each month and soon you will build a significant amount of cash just from negotiating a lower interest rate on your credit card.