Reducing the fees and interest paid on your credit cards can save you big money!!
Transfer your balances to a zero interest card.
If you have 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 traveler, 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.
Don’t just pay the minimum due.
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.
Also when you pay late, some credit cards will increase your base interest rate. So that low interest card can quickly turn into a high interest card if you pay late.
Have bad credit or a low credit score?
You should consider debt consolidation or debt negotiation. You can negotiate your debt with your creditors yourself. Of if you are not good with that sort of thing, hire a company to help you. Your goal is to lower your interest rate and if any fees have been assessed to your account, you want them removed.
If you negotiate a lower balance due, GET IT IN WRITING! Make sure the negotiated amount is plainly stated in the letter and the letter is on the companies letter head. And whomever is offering you this deal, their name and title is also plainly stated. Keep this letter somewhere safe. You may need it at some point if you see the old fees or the interest rate comes back AND you have kept your end of the deal by making on time payments. Keep in mind most deals go away if you start paying late again.