While extremely convenient, credit cards also carry a cost for there use. Most people don’t realize just how expensive carrying around a credit card in your wallet can be. Each year many big spending credit card consumers can throw hundreds or even thousands of dollars out the window using credit cards. Even though you do not use credit card much but still you can save hundereds of dollars each year with these 3 cedit card tips.
Never Pay the Minimum Payment
Your credit card company usually makes sure you know that there is a minimum payment. Even if you owe thousands of dollars, your minimum payment can seem extremely low, sometimes only 3% of your total balance. However, what the credit card companies don’t tell you is that if you have a large balance and only pay the minimum payment for the next few years you will cost yourself possibly thousands of dollars in interest costs alone. In fact, that purchase at the record store for $50 over time will double. To avoid paying interest only and never touching the principle make sure you always pay more than just the minimum payment.
Transfer Your Balance Amount to a Lower Interest Credit Card
Most Americans receive several credit card offers each month and most have some very enticing interest rate offers. For example, many credit card offers will transfer your existing high interest rate credit card for free to the new card and allow you either 0% interest for 5 months or a very low interest rate for a specific period of time. If you have a high balance in which you pay hundreds of dollars each year on interest payments, in many cases it is in your best interest to accept these offers and enjoy zero or low interest for the next 6 months to a year.
Use Credit Card rarely but you can use Debit card in place of it
Frequently using credit cards makes us addicted to it. Avoid expensive things when you do not need it. We can easily pay for that meal or fill up our car with gas with our debit card and not pay any high interest fees. Why not use debit cards when they are just as convenient as credit cards. Use your debit card to avoid high interest fees in the long run and you can literally save hundreds in interest fees each year.