Don’t Pay Interest on Credit Cards.
Credit cards offer a convenient way to pay for goods and services, but this convenience comes with a price tag.
Credit card companies charges outrageous interest rates up to twice or even triple than what you can get elsewhere.
As soon as you fail to pay off the credit card balance in full, these high interest payments start eating away at your monthly budget.
If you’re using a card, make sure you know your limitations and don’t over use it. If you’re unable to resist the temptation of using the card more than you can afford – get rid of it.
Clear Your Credit Card Debt
The golden rule of financial planning is to clear your most expensive debts first.
If you’re unable to clear the credit card’s balance every month but choose to keep the card rather than cancel it – consider taking a low-cost loan as an alternative to the credit card’s balance. You can save hundreds of dollars a year.
A loan, any loan is likely to be less expensive than the Interest you pay the credit company.
Take Advantage of 0% Credit Card Offers
If you’re struggling to reduce your credit card debt, consider using a 0% balance transfer credit cards.
These cards enable you to transfer all of your high interest credit card debt into one card or two cards with 0% interest. The lack of interest will help you consolidate your debt much quicker.
Ask for a Rate Reduction
Call your credit card company and ask for an interest rate reduction. Insist on it, and make sure they know that if you don’t get it you’ll take your business elsewhere. It the first person you talk to is not cooperative – ask to talk to a supervisor.
According to the Public Interest Research Group (PIRG) study, 56% of those surveyed managed to reduce their credit card rates simply by asking their credit card companies to do so.
Avoid Late Fees
As if credit card’s Interest rate is not high enough, late fees worsen the situation. You should avoid late fees at all cost, not to mention that an Interest rate increase may follow.
To avoid both, consider the following:
- Keep a calendar with your normal monthly payment days listed.
- As the normal monthly date approaches (10 days prior will do) – if you haven’t received a statement call the credit card company and ask for one.
- As you receive your credit card statement – send the minimum payment.
- As the near due date approaches (10 days prior will do) – send a second payment.
Avoid Cash-Back Credit Cards
Much like loyalty cards, cash-back credit cards are designed to make you spend more than you intended to. The more you spend – the more money you get back, right? It’s a brilliant concept, for the credit company, that is.
Only problem is that you need to spend a lot of money to get a small reward’ and if you get into debt and pay Interest on it, than you are doing your worst deal ever.
Not that they are not entirely bad. If you do have self control and use them only for purchases you intended to make in the first place, you can get back 1%-5% on all of your spending. Most people however, are tempted by the offer and end up spending way too much.
If you do own one, make sure you use them to pay your utility & phone bills. Most companies accept credit card payments nowadays.
Avoid Cash Advances
If you need cash, taking a cash advance using your credit card may be more convenient than asking for a loan. It is however the worst option.
Convenience cost money, and in this case – a lot of money. Credit card’s interest rates on cash advances are outrageously high (much higher than the already high credit purchases Interest), plus you get no grace period, meaning the interest starts to accrue immediately.
A regular loan from your bank may be less convenient to acquire, but way cheaper.
Avoid Credit Card’s Gift Cards
Although Visa and MasterCard gift cards offer convenience, these gift cards come with fees for both you and the recipient. If you prefer giving money cards as a present, buy a nice card and add a check or cash to it.
It never hurts to ask for anything from a credit card issuer. You would be surprised at how much they are willing to make you happy and keep your business.
As they spend millions every year recruiting new customers – they will go the extra mile to keep you as a customer they already have.
They will wave yearly fees, over the credit limit fees, reduce interest rates as well as process over the phone payments without a charge if you just ask nicely.
Sometimes they will even reverse late fees if you don’t tend to be late on a regular basis.
Click here for more outstanding money saving tips: 101 Money Save Ways – Communication Money Saving Tips