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The fact cannot be denied that paying interest on your credit card can become very expensive really quick. So, are you wondering how you can avoid paying interest on your credit card balances? The answer is not that complicated, but the people find it hard to master. Sadly, people just don’t want to hear the truth.
Understanding Credit Cards
What is a credit card? The official term is a revolving line of credit. Generally, it can be said that it is a card having a set amount of funds (known as a limit) you can borrow whenever you feel like. Here, ‘borrow’ is a keyword. Credit cards also come with an interest rate, pretty much like your other loans.
Credit cards have a regular repayment cycle as well, owing to this, the amount of interest you pay each month will also vary. The amount of interest will be decided by the amount you spend, the amount you are repaying, and the time when you are repaying. But, the good news is that there are ways to avoid how much interest you will pay.
So, allow me to discuss how you can avoid paying interest on a credit card.
Avoid Spending On The Card After Transferring A Balance
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Some credit cards will offer 0% on both the purchases and transfers. But, you should not spend on a credit card that you have transferred a balance to, it can result in hidden charges. In the event, the 0% purchases window is shorter as compared to the 0% balance transfer period, as soon as the purchases deal expires, some providers will charge interest on any new spending you make, despite the fact you pay it fully each month. This is because, as you will still be having your balance transfer debt to pay off, you are not actually clearing your balance. In simple words, it can be said that for balance transfers, using a balance transfer credit card can prove cost-effective and a purchase card for spending.
Increase Your Income Or Cut Down Your Expenses
You can either increase your income or cut down your expenses. With the help of these two methods, you will be able to have more cash in order to pay off your debt. Cutting down your expenses is also an effective way to deal with the credit card debt. On the other hand, increasing your income will have great benefits. If you put your best efforts, you can earn as much money as you want.
You can sell different items in your home to increase your income. You might be having unused items in your home, sell them to earn quick cash so that you are able to pay off your debt. You can also do extra shifts at work to earn some extra money until your debt is finally paid off.
Pay Off Your Credit Card Balance In Full
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One of the easiest and most effective ways of avoiding interest on your credit card is to pay off your credit card each month. Rather than carrying a balance into the following month and getting charged interest fee, you should choose to settle all your debts each month.
In addition, when you follow this spending pattern, it will also help you to keep charges reasonable. If you really want to repay the balance each month, make sure it is low enough so that you will have enough funds to do so. The best part is that if you are paying your credit card balance each month, it will help in building positive credit history and will also help to raise your credit score.
Get Yourself A Credit Card With 0% Interest
If you are eyeing to pay off your credit card balance in full each month, then you need to have a control over your spending habits and follow-through. Perhaps, you don’t have the financial habits or you are having unpaid credit card balance you can’t repay in full just yet.
You can also make the most of a 0% introductory interest rate. If you go for a new credit card having a 0% interest rate, the best thing is that you won’t be charged any interest rate for the complete introductory period i.e. 12 months.
All Credit Cards Are Not Equal
It’s sad that some credit cards don’t offer a grace period. This means as soon as you make a purchase, it will immediately reflect in your account and the interest rate clock will start ticking. Generally, if you have a bad credit, card companies will not offer a grace period. With these cards, it is not easy to escape interest, therefore they should be avoided at every cost. However, most of the credit card companies do offer grace periods for their customers. In order to ensure your card is one of them, make sure you have read the fine print thoroughly.
Sophia Jones tries to live her life like the sun – setting her sights high and vowing to always rise up again. Always game for an adventure, Sophia loves widening readers and her own expectations of our vast, beautiful world. As a journalist, Sophia writes to inform. As a creative writer, Sophia strives to inspire. Overall, she hopes to captivate. She currently writes for sites on credit cards, banking, insurance and investing etc.
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