Credit Cards can be of great use if you use them wisely and if you are aware of how you can maximize the benefits by minimizing the charges. Credit Cards have various fees and charges associated with them and interest rate is one of the most important among these charges. However, interest is charged on the outstanding balance of your card only if you don’t pay your credit card bill by the payment due date. People sometimes fail to make on-time payments and their credit card balance keeps increasing due to the interest rate. There are several ways to reduce the interest charges on your credit card or to avoid them totally. We are going to discuss the same in the article below:


Ways To Minimize Interest Charges

Some of the most effective steps that you can take to minimize the interest costs on your credit card are as mentioned below:

Pay Credit Card Bills On Time

The best thing you can do while using your credit card is to make your credit card bill payments on time. You will never have to pay interest if you pay the bills on time. The interest starts accruing on your card’s outstanding balance only when it is not paid by the payment due date. This will help you avoid interest rates as well as build your credit score. You should set the bill payment reminders so that you don’t miss your credit card bill payments ever. If you have multiple credit cards, you can try to merge the payment due date of all your cards by contacting your card issuer.

Make The Best Use of the Interest-Free Period

If you are using a credit card for a long time, you might be aware of the fact that you get an interest-free period to pay off your credit card dues. This interest-free period can be of up to 45 to 50 days, i.e. you can get up to 50 days to pay for the purchases that you have made using your credit card. The interest-free period comprises your credit card billing cycle which is of 30 days and the grace period, which is of around 15-20 days. If you make most of your large purchases at the beginning of your credit card billing cycle, you will have a lot of time to pay off the bill. This is how you can make the best use of your credit card’s interest-free period.

Convert The Outstanding Bill Into EMI

If you have made some really large transactions with your credit card and you are unable to pay the bill due to some reason, the outstanding bill might keep increasing due to the interest charges. But before the interest starts accruing, the best thing you can do in such a situation is to go with the EMI option. You can convert your credit card bill into EMIs and then pay it off in smaller parts every month. The interest on EMIs would be slightly lower and you can also avoid a negative impact on your credit score by doing this. Almost all card issuers allow credit card bill conversions into EMIs and you can do it by contacting your credit card customer care or via internet banking.

Improve Your Credit Score

Some credit cards do not have a fixed interest rate, but these cards charge different interest rates from different cardholders on the basis of their past payment behavior and their credit score. For example, the IDFC First Bank Credit Cards come with a variable interest rate of 0.75% to 3.5% per month. People who have an excellent credit score may get a credit card with an interest rate as low as 0.75% per month and those who have a poor/average credit history may even be charged an interest rate of up to 3.99% per month. So, building your credit score should be your primary goal while using a credit card as it will help you get a credit card with low interest or your card issuer will lower the interest on your current card itself.

Try Getting a Credit Card With Low-Interest Rate

There are some credit cards that come with a lower interest rate than usual. However, these cards may have a higher annual fee as most of the low-interest credit cards are premium credit cards. Not everyone prefers having a credit card with a high annual fee. But, if you are ready to pay a high amount in the form of an annual fee to get premium benefits, make sure that you choose a card that has a lower interest rate.

Bottom Line

You can make the best use of a credit card only if you are responsible enough for your credit card payments. You should try to pay your credit card bills in full every month s that interest charges never get accrued on your card. But, even if you have consolidates some debt, you can get it converted into EMIs or pay it as soon as possible. We hope that the above tips will help you understand how you can avoid paying high-interest rates on your credit card. If you still have any doubts in your mind, let us know in the comment section below!

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