A credit card account issues a statement every month with the amount of the minimum payment and its due date. You may pay this minimum amount by the given date. But it’s better to clear the full balance on time. Then no dues will be left to charge interest.
But you may find it difficult to do so every time. So, here are 5 smart tips to lighten the interest burden on your credit cards.
#1 – Pick a Credit Card with the Lowest Interest Rate
This is the best facility on a credit card to reduce the interest burden. A card with the lowest interest rate will naturally minimise the finance charges on unpaid dues or late payments.
#2 – Keep Clearing Your Bill
Try to keep paying the bill in small amounts as and when you can. Thus, ensure to clear the bill within the payment date. Interest is levied as per the average daily balance of your card. So, it’s best to keep reducing the balance every day with regular payments to reduce interest charges.
#3 – Pay the Balance Early
Sometimes, you may not be able to keep paying down the bill throughout the month. Then try to clear the bill as early as possible, to save money. That day onwards, the average daily balance would be less when your account is credited with your payment.
#4 – Get a Credit Card That Excludes Certain Charges
Apply for the best credit cards that come with:
- No reward redemption fees
With this facility, no fees are charged for redeeming credit card reward points. So, you can maximise your use of the rewards without paying for that.
- Zero annual fees
A credit card with this feature doesn’t charge annual maintenance fees for letting you use the card. Such cards are called free credit cards. Lifetime free credit cards never charge this fee.
- No over-the-limit fees
This facility implies that you won’t be charged if you use the card for payments exceeding the assigned credit limit.
- Zero cash advance fees
With this feature, a credit card offers interest-free cash withdrawals. So, you won’t be charged if you use your credit card to draw cash.
With these facilities on your credit card, you’ll pay fewer charges. This can help clear your card bills faster. You may have fewer dues and hence, a lower interest burden.
#5 – Finance Big Purchases Differently
It isn’t wise to use a limited line of credit to finance high-value purchases. You may end up with too many dues and therefore, a higher interest burden. Instead, consider taking a loan against your credit card. Then you can pay it back in EMIs within the specified repayment tenure. Learn the minimal processing fees and interest charged for this facility. Check if you can get a percentage of cash back on your first credit card EMI transaction.
You can also use the offers at partner merchants on credit cards. This can discount your expenses financed by the cards. So, with fewer dues, interest charges will also reduce!