How You Can Reduce Interest Cost
How You Can Minimize Interest Charges?
Here are some suggestions to help minimize the interest charges on your credit card:
Pay your credit card balance in full each month.
If you decide not to pay off your balance in full, try to pay more than the minimum balance due.
If you carry a balance from one month to the next, consider a credit card with a lower rate of interest.
Understand the interest charges and fees being applied to your credit card account. For example, remember that with cash advances, interest begins to accrue as soon as the cash is advanced, and with credit card issued checks, interest begins to accrue once the check has been cashed.
Be aware that the quicker you pay off your outstanding balance, the less interest you’ll pay.
Consolidate your debt from higher interest cards-like department store cards to a lower interest credit card.
Make payments on time. Take advantage of helpful tools like automated payment options and the use of credit card checks.
Be a careful buyer and know the cost of using credit cards. Be sure to read the important information in the credit card agreement mailed to you when you receive your credit card.
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About The Author
Jim Partridge is a staff writer writing for
http://www.allcreditcarddirectory.com/ The website is dedicated to providing a choice of credit card options for people to consider.
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Tags: advice, card, cost, credit, finance, reduce, savePublished by: faison on July 7th, 2008 | Filed under la-poste-finance.info | Comment now »
Navigating the Credit Card Minefield
Do a Google search for credit cards nowadays and you’ll find a truly baffling array of credit cards on offer with everything from 0% balance transfers, cash back rewards, and low interest payments on new purchases to Airline miles and free music CD’s. But in this minefield of offers, what’s the best card to choose?
It’s immediately obvious from the vast array of products on offer that everyone wants a piece of your business, but with financial products you need to look beyond the bright lights of the offer and decide which card best suits your needs. That is to say, what you will use the credit card for.
So how do you compare all the offers to decide which card to get? You don’t, well at least not yet anyway. The first thing you need to do is sit down and work out how you’re going to use the card. For instance, are you going to transfer an existing balance to the card, do you intend to pay the balance in full each month, do you want to make a lot of expensive purchases with the card, etc, etc.
Think about it honestly as this is what should really influence the deal you should eventually sign up for. So if you’re transferring a large balance from an existing card something like 0% interest on balance transfers for 6 months would probably be interesting (as you’ll save 6 months worth of interest payments) but it’s absolutely useless if you’ve got no balance to transfer.
Likewise high cash back incentives are only going to be any good to you if you intend to spend a lot of money with the card. Cash back rates are usually around 1% so you’re going to need to spend 100 to make 1. So in order to reap the financial rewards of a cash back incentive you’re going to need to both spend a lot of money with the card and pay off the balance in full each month to reap the true reward.
Other attractive incentives include 0% interest on new purchases for 6 months. Again with an offer like this, it’s only going to be of benefit to you if you intend to use it. So if you’re thinking of making a sizable purchase and would like what is in effect a 6 months interest free loan to pay it off, that’s the ideal offer for you.
Of course all the examples here are pretty cut and dried and your own financial situation will probably be a mix of several conflicting priorities in terms of your expenditure and ability to make payments. However don’t be lulled into thinking that there’s necessarily one solution to fit all. You could transfer a balance to one card to try and clear an existing debt while getting an interest free loan for a new purchase at the same time, just use two cards.
There’s quite a big health warning here though. You should only ever take on credit like this if you can control your spending on the cards with a will of iron. The worst case scenario would be to set off with good intentions only to end up with 2 balances to pay off both charging interest.
So what’s the sensible option? Think about what you need financially over the longer term, find the product that best suits this need and go for that.
Paula Marriss is a financial advisor and editorial contributor at The Money Zone where she writes regular articles on Credit Cards and other Personal Finance topics. To read more please visit http://www.money-zone.net/creditcards/
Tags: advice, balance transfers, choose, credit cards, finance, help, interest