Strategies for Evading Credit Card Interest

Strategies for Evading Credit Card Interest

Many of us experience times where we need to maintain a balance on our credit cards. These instances could be due to unforeseen expenses, like auto repairs or medical bills, or as a result of lessening income. Credits cards can offer us financial flexibility during these periods by allowing us to pay over time. However, credit card interest rates can be extremely high, so reducing the amount of interest we pay is essential.

Tips to Forgo Interest on Credit Cards

The secret to escaping credit card interest lies in comprehending your card's grace period. This is the period between the end of your billing cycle and your due date within which you can pay off your total balance to prevent interest fees on fresh purchases. Typically, credit cards offer around 25 days for this window.

If you clear your entire statement balance before the due date, you can dodge interest fees on any new acquisitions made throughout that billing cycle. However, the grace period typically only applies to new purchases—existing debts will keep amassing interest charges during the grace period and after until they're repaid.

Leveraging Your Card's Grace Period

Here are some ways to optimize the use of your card's grace period:

1. Always pay your monthly payments on time to retain the grace period. Missing just one due date could potentially forfeit the grace period on new purchases until full settlement of the entire balance.
2. To enjoy the grace period benefit on recent purchases, be sure to shell out the complete statement balance mentioned, even if it's by a fraction. Paying anything less cancels the grace period.
3. Consider enabling automatic payments from your bank account to make sure you never miss a due date and potentially lose the grace period. For details on how to arrange such payments, [read this article]. Remember that some auto payments may induce additional costs.
4. Keep tabs on your credit card purchases for the current billing cycle by logging into your account online. Any new charges won't benefit from the grace period until the following statement period.
5. For vast upcoming expenses that you need to settle gradually, it may be wise to open a new credit card and use the introductory 0% APR period for transactions instead of sacrificing your current card's grace period. Find some of the most beneficial 0% intro APR cards [here].

The grace period is an invaluable device for evading interest charges. Making prompt monthly payments, and paying the total statement balance in full will allow you to carry a multitude of purchase balances without interest charges from one grace period to the next.

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To avoid accruing interest on new credit card purchases, it's crucial to pay off your entire statement balance before the due date. Failing to do so could result in interest charges on those purchases during the grace period.

Managing your credit card spending wisely is important to make the most of the grace period. Keeping track of your purchases and paying the full statement balance can help you avoid interest on both new and existing debts.

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