Monthly credit card payments on high interest credit cards can quickly derail a consumer from a fiscally responsible path and throw even the best budget out the window.
Once compounding interest begins accruing on a consumer’s credit card balance, the race to minimize the damage begins as the balance grows and the amount of the monthly payment applied to the principle declines. But, there are a few ways to cut down on your monthly credit card interest payment and save you money.
Balance Transfers. Transferring your high interest credit card balance to a new credit card with a low 0% interest rate will give you the opportunity to pay off the balance much sooner as well as saving you thousands of dollars in interest payments.
Pay early and often. The monthly interest fee which your credit card company charges you is calculated by your average daily balance. The sooner you make your payment, the less you will you will owe in interest. In fact, making multiple small monthly payments as often as you can will also lower the amount of interest that you are charged.
Pay on-line. Due to the fact that mailing and processing of your payment may take 3-5 days, that’s an extra 3-5 days that your account accrues interest. Paying your bills on-line will save you money by assuring you that you payment is processed immediately.
Ask for a special financing. Your current credit card company can actually give you the same promotional offer that others extend to new clients. This means that you can get a 0% APR for a fixed term from your current credit card company, just ask them.
Ask for a lower interest rate. If your credit card company isn’t willing to offer you special financing, request a lower interest rate. Just make sure that your account is in good standing and that your utilization rate is 30% or less. (Meaning that your balance is 30% or less than the credit limit.)
Follow these tips to save money and get out of credit card debt.
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