How to Reduce Your Credit Card Interest

We go beyond the basic advice that suggests moving your balance to some other credit card offering lower APR.

Reduce Your Credit Card Interest

Credit card interest is something all of us have to deal with. And we don’t like it.

Yes, you could pay your balances in full and on time, and don’t think even about it — but not everyone is in this situation.

The first solution that comes to mind is to get a credit card with a low APR, or even one of those that includes an introductory period of 0% APR; and these days there are credit cards that can extend that period for up to 21 months.

If you can do that – go for it. This article, however, presumes you can’t do that, or you have already did that, and now you have to deal with interest payments. And you want to lower them as much as possible. So how to do that? Here are 5 things to try…

1. Make more than one payment a month

Banks won’t force you to do this, but if you do make multiple payments per month they will take notice and act accordingly. Actually, it would be their software that will kick in to reduce interest on your balance.

The math is rather simple — as you make more than minimum payments, the less balance there is to deal with. Thus, your interest incurred is lower.a

2. Pay early

Another way to reduce interest on your credit card balance is to pay what’s due early. When the payment gets credited to your account, the average daily balance will be lower from that day forward.

Yes, we may be talking about dollars and cents here, but every little counts — especially if you keep repeating this from one month to the other.

3. Postpone big purchases

We are not saying you should NOT make them — if you need to make some big purchase, you will do it. Rather, we are saying that you should first find out when your statement closing date is, and make a large purchases after that date.

This will make charges appearing on your next statement, giving you an additional month to pay it off. And by all means you should figure out a way how to pay off big purchases as soon as possible.

4. Use multiple cards to lower your balance

We advise everyone to have more than one credit card and use them for different purposes. That’s how we roll, and we even get rewarded for that (with points and cash back).

Another benefit of having more than one credit card is that you could use it to lower you balance per card. You will still owe the same amount of money, but the total interest on two cards could be lower. In other words, owing $1,000 on a single card could incur higher interest than owing the same amount spread across two cards ($500 on each). No need to pay extra when you don’t have to.

5. Ask for a lower interest rate

Finally, you could simple call or visit your credit card company, and ask them for a lower rate. If you’ve been a reasonable responsible customer, chances are they will comply — cause they don’t want to lose your business.

If that doesn’t work, well, you can tell them you will move your balance to some other credit card company and — if that doesn’t work — act accordingly. There are many credit card options on the market today, and there is no good reason to stick with one specific company if it can’t help you better manage your debt — and even get out of it completely.

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