Credit cards carry an interest rate, so if users make the minimum payment and leave a balance to be paid another day, they will be charged interest. According to SoFi, the interest rate will be between 14.87% and 16.88%.
Most people don’t favor paying interest, so they ask how they can avoid credit card interest. Many credit cards are offering 0% APR introductory periods. Now you must wonder what the APR period is and how it affects your credit interest. So, this article will help you to understand what APR is all about and how it can lower your credit interest. If you want to know more about this, scroll down and continue reading.
What is the Annual Percentage Report?
How many of you keep a check on the economy and annual financial reports? While private and government companies come up with innovative measures to ease your financial conditions, you are equally responsible for your financial conditions.
Financial Institutes release an Annual Percentage Report highlighting interest rates and additional credit card charges. It does give you an overview of how the companies will change interest rates on your credit purchases. However, it will take time for you to understand the details and guide on the APR.
The APR included the upfront and hidden credit card costs, making it simpler for customers to understand and compare the charges applied by different banks and financial institutes.
How can you avoid paying interest on a credit card?
Below, the article discusses a few strategies you can use to avoid paying high-interest rates on your credit cards.
1. Give attention to your grace period
You have to pay the interest credit on the billing date every month. But most banks and lending institutions give you a grace period to pay the total amount. For them, giving you a grace period is unnecessary, but many do that to offer convenience to their customers. So when you pay your credit bill in full each month, you earn yourself an extra grace period. So, for example, if your billing date is the 15th of each month, and if you have been regularly paying your credit card bill on time for the last few months, you get a grace period for about one month or more to make the payment.
2. Look for 0% Credit Card Offers
A credit card offering a 0% interest rate is the one that you should be eyeing. If you are a heavy spender and want to clear off your debt within the set time frame, this is your go-to option. Make sure you set a fixed amount that you can use to settle down your credit card bill. So, for example, if you decide to put $5000 to settle your credit card, you need to spare approximately $420 each month to maintain the 0% interest rate.
3. Try paying the billing in full
It is the most obvious strategy to avoid high-interest rates on credit cards. For example, those who spend a limited amount using a credit card can manage to pay the bill in full. However, if you can keep up paying your bills in full each month before your due date, you will never have to pay extra interest charges for using a credit card.
If you want to learn more on how to avoid credit card interest, seek help from experts at SoFi who will help you find the best credit card.
