How to Save Interest on Your Credit Cards Balance?
Its fun to use credit cards, as it provides a very nice facility that you don’t need to carry cash everywhere and you can shop and travel risk free. Along with the advantages, the credit cards also carry the limitations of levy of different charges, penalties, remembering the cut off dates and many more.
Many a times it may happen that your credit card score may drag you in the interest slab of 25 to 50 % which is very high. Higher interest rate payments, missing out repayment, etc are some of the reasons which will reduce your credit score and it will create difficulties while you are in need of secured loan.
Credit Card offers may be bound with lots of conditions and you might not be able to track them as they are strategically designed. But it may happen that while running after the overwhelming offers you may loose much of your money paying credit card interest and transfer fees. We have to take care of our credit card score. We have discussed herewith certain tips to save your interest to be paid on Credit Card Balances here under:
- The first tip that can be shared to save your credit card interest is that you must pay off the credit card balance which carries the highest debt charges. This will help to reduce the interest. Once you finish paying the debt with highest interest rate, carry on with next highest interest charging credit card. Paying of the credit card with highest debt will also improve your credit score.
- The next tip is you can merge payment of your credit card along with the repayment of overdraft. This is to say that if your overdraft facility charges you 20 % interest and your credit card charges you 15 % interest, than pay your overdraft with all the cash you have and pay for your expenses using your credit card.
- In case you hold more than one credit card, and if both carry different interest rate, than be wise to transfer the balance of costlier card to the cheaper card so that your interest cost will ultimately be reduced.
- In case when you have bought a credit card with zero percent interest rate, it will not be a lifetime case. So keep watch when the scheme of zero percent interest expires. Otherwise you may loose a high amount on credit card interest.
- There will be lots of conditions when you get the Zero Percent interest rate schemes. One of it may be you must not miss the repayment on time. In case you miss a single repayment of time it will attract penalty or you may loose the benefit of zero percent interest rate scheme. This will ultimately increase your interest cost.
- When you are in liquidity crises and are unable to repay the credit card debt, you may opt to borrow from peer – to – peer lender. Interest rates of peer – to – peer lenders are 20 to 30 % lower as compared to the interest rate on credit cards. So borrow for short term and repay the credit card debts on time. This will help to save a margin of interest cost in difficult situations.
- You may be misleading by the introductory interest free card and you may merge the balance of the high interest card to the interest free card. This may attract a very high transfer fee and you will be trapped as this transfer fee may be higher then the interest rate on your credit card.