These days, as the economy continues to dwindle, consumers should pay more attention on how they manage their finances. If you’re a credit card holder, this article presents some strategies on how you can slash off your credit card costs.
Transfer your balances to a zero interest card. If you own multiple cards with existing balances on each, one way to cut costs is to get a 0% APR balance transfer credit card. By combining all your debts into a single account, you can take advantage of the zero-interest period to pay off your balances at no extra charge.
But bear in mind that the zero interest only applies for a limited period. Some credit cards offer the 0% APR for only 6 months while others allow up to 12 months of zero interest. Therefore, you need to make sure that you can finish your payments within the zero-interest period.
Don’t forget that the zero interest may only apply to your balance transfers and not on your purchases. Thus, be cautious about using your 0 APR credit card on your shopping. Otherwise, you may incur a very high interest on new purchases that you charge to your card.
Get a Reward Credit Card. Credit cards with rewards program can be great tools for reducing your expenses. For instance, cards with gas rebates allow you to save on your gas purchases while cash back reward credit cards enable you to save more on your shopping. If you’re a frequent traveller, a travel reward credit card gives you the chance to fly for free or travel for a discount.
However, it’s important to remember that reward cards would only work if you can pay off your balances in full each month. Don’t forget that credit cards with rewards often have higher interest rates than non-reward cards. If you often carry over your balances from month to month, it may be better to get a non-reward credit card with a lower interest rate.
Avoid the minimum due payment. Most credit cards require a very low minimum payment which may seem like a great thing. Still, if you make it a habit to pay only the minimum due on your card, you are also prolonging your debts in your account. Remember that each time you carry over a balance on your credit card you also incur the additional interest costs. Thus, credit card companies make more money from their customers each time they don’t completely pay off their monthly charges.
Never be late with your payment. As a credit card holder, it is your duty to pay your debts on time. You may think that paying the late penalty cost on your card doesn’t make a big difference. However, some credit cards- especially those with rewards- charge very expensive late penalty fees. Why should you pay more than what you owe when you can avoid the additional cost just by submitting your payment on time? Late penalty charges, no matter how small they are can add unnecessary burden to your budget.
ABOUT THE AUTHOR
Shelly Evans is a credit analyst for Bad Credit Resources for seven years. This website offers resources that specialize in providing bad credit personal loans and credit cards for bad credit to people with poor credit score.
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