Our world today is a world of plastic and the credit card has become incredibly convenient for all kinds of transactions. Unfortunately, many tend to run into credit card debt or huge credit card bills. This is simply because they fail to manage their credit card interest payments. Well, read below for some tips on how to manage your
Well, read below for some tips on how to manage your credit card interest well and not to let it manage you. Here are Four Ways to Lower Your Credit Card Interest Rates.
#1 Read The Fine Print
Credit card companies charge a hefty interest charge on unpaid balances. These are much higher than any loan or overdraft interest rates. Most credit cards charge 15% to 18% per annum on unpaid balances depending on your creditworthiness with them under their tiered interest rate structure. Under this structure, credit holders with prompt payments in the last 12 months enjoy the lower 15% rate. For holders with less than 9 prompt payments in the last 12 months will be subjected to 18%.
#2 Never Overspend
A rule of thumb when using your credit card is to never overspend on your purchases. Always ensure you have enough cash to pay for your purchases before you commit to it. While this may seem to defeat the purpose of having a credit card, it will help you avoid rolling over your balances and incurring hefty interest charges when it falls due.
#3 Take Advantage of Interest-Free Periods
Most credit cards offer interest-free instalment payments if you purchase products from their approved vendors. This is a great way to afford things that may be out of your budget as you are usually allowed to split your payments into 9 to 12-month instalments, interest-free. It is a good tip for rolling your excess cash to take advantage of other investments 🙂
#4 Cheaper Interest Rates
If you have run up a large debt on your credit card and are unable to pay off your credit balance, do consider looking for other banks which offer cheaper interest rates when you transfer your balance to them. Due to the great competition in the credit card market, banks are usually willing to work out lower interest on your transferred balances or instalment payment schemes to help you manage your debt.
Manage your credit cards wisely and save hundreds or thousands on unnecessary credit card interest payments.