How to Avoid Interest on Credit Cards

(June 2024)

How to Avoid Interest on Credit Cards

In This Article

Looking for ways to reduce the interest you pay on a credit card? Or thinking of ways to avoid credit card interest entirely?

If these questions are true in your case, congratulations! You are about to dive into breakthrough content that can liberate you from paying recurring interest on credit cards. Are you curious about what those points are?

Continue reading this content to the end. This article walks you through how to avoid interest on credit cards—and ways to reduce interest if you can’t completely stop it.

To Avoid Interest on Credit Cards:

  1. Pay Off Your Balance in Full
  2. Take Advantage of Your Grace Period
  3. Use a Balance Transfer Offer or 0% Interest Credit Card
  4. Don’t Overspend
  5. Plan Major Purchases

To Reduce Interest on Credit Cards:

  1. Use a Lower-APR Personal Loan to Consolidate Credit Card Balances
  2. Make Several Payments Every Month
  3. Pay Down Credit Card Balances With High APRs First
  4. Request a Lower APR From Your Credit Card Issuer

To Avoid Interest on Credit Cards

1.Pay Off Your Balance in Full

To circumvent interest rates on credit cards, pay off your balance in full every month. Don’t carry any unpaid balance on your card into the next month; doing so prevents you from owing credit card interest at all. Keep the spending activities on your credit card frequently in check to avoid spending beyond your monthly budget.

2. Take Advantage of Your Grace Period

To steer clear of credit card interest, your best bet is to maximize your grace period. For a card that offers a “grace period” service, you have at least 21 days to make purchases without paying any interest—and the good news is this: Extend this period by paying your balances in full before the due date of your grace period.
Do this continuously, and worry no more about interest on your credit card. Note that carrying even a small balance on your card beyond your grace period spells its end, and both your unpaid and new balances begin accruing interest according to your card’s APR.

3. Use a Balance Transfer Offer or 0% Interest Credit Card

To keep away from credit card interest, utilize a balance transfer offer or a 0% interest credit card. Based on the card, the 0% APR credit card promo lasts anywhere between 12 months and 21 months. During this period, you can make large purchases and pay back the balance without any interest.

To utilize this opportunity, move a portion or all of your unpaid balances over to a new card, and you get 12 to 21 months to pay it off without adding any interest (this is a balance transfer).

Nevertheless, for a balance transfer to happen, you must possess a Fico score of 690 or above and be prepared to pay 3%–5% of the transferred balance. In addition, keep in mind that you start owing interest on the remaining balance after the 0% APR promotion ends.

4. Don’t Overspend

To dodge paying interest on credit cards, avoid extravagant purchases. Create a budget to know your monthly income, the expenses you can handle, and the amount you can afford to spend in a month.

Don’t know how to create a budget? Use a budgeting app like Mint or create a customized app to track your expenses and ensure you are spending less than you earn. Create a budget today to hold yourself accountable!

5. Plan Major Purchases

To avoid interest on your credit card, be cautious when making large purchases. Think twice before you incur credit card debt for an expensive item that may take you a long time to pay off.

Consider your monthly budget in case your issuer penalizes you for late payments. To avoid accruing interest on major purchases, use a 0% APR credit card to have at least a grace period of one year to pay your debt interest-free.

Consider some store cards or medical credit cards that allow you to defer interest on the condition that you pay back your balance in full by the end of the promotional period. Otherwise, you are responsible for paying interest on the whole amount of the initial loan.

To Reduce Interest on Credit Cards

1. Use a Lower-APR Personal Loan to Consolidate Credit Card Balances

To bring down interest on credit cards, utilize a lower-APR personal loan to merge credit card balances. Combine your multiple debts into one new debt to easily manage your monthly bills and save money by paying the debt back at a reduced interest rate

2. Make Several Payments Every Month

To shrink the interest you pay on your credit card, make multiple payments each month. Don’t wait until your billing cycle finishes before you pay back. Make payments anytime to shorten your overall interest.

Be aware that the interest you pay reflects the average daily credit card balance and not the total monthly balance. Consequently, making several payments in a month lowers your average daily balance, which in turn lowers your interest.

3. Pay Down Credit Card Balances With High APRs First

To reduce the interest rate on credit cards, first pay down the credit balances with high APRs. It might be challenging to confront your debt head-on, especially if you are paying off several loans at once.

However, this article gets your back to help you figure out how to tackle the situation. Use the debt avalanche method to start paying your debts from the highest interest rate to the lowest. Make the minimum payment on each of the debts, then apply the remaining balance to the debt that tops your list.

4. Request a Lower APR from Your Credit Card Issuer

To minimize the interest on your credit card, demand a card with a lower APR from your credit card issuer. Do this in two ways: First, ask your issuer to directly reduce your interest rate, especially if your credit score has increased since you started using the card. Second, request a new credit card with a lower APR if you are not satisfied with your existing cards.

Bottom Line

You can deal with credit card interest in two ways. The first one is to learn how to totally avoid the interest on your credit cards. And the second way is to familiarize yourself with the ways through which you can reduce interest.

To completely part ways with interest on your credit card, pay your balance in full before the due date and maximize your grace period. Consider using the balance transfer method or credit cards with a 0% APR promo.
Moreover, stay away from extravagant spending and be careful when dealing with major purchases. Besides, to reduce interest on credit cards, merge your credit card balances into a single personal loan with a lower APR.

Secondly, make multiple payments in a month and focus on paying down credit cards with the highest APRs. Finally, demand a lower APR from your card issuer.

There you are, break free from the shackle of credit card interest today by following the above instructions!

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