Tire of shelling out big bucks for credit card interest each month? Try these four ways to save on credit card interest.

3 minute read

Have you looked at the interest charges on your credit card statement lately? If you’re carrying a large balance, you’re probably paying a chunk of interest each month that you could spend on other expenses or even on just a nice dinner (or a few nice dinners) out with friends or family.

If that’s the case, don’t resign yourself to handing over all that money to a credit card issuer every month. Instead, take these four steps to decrease and/or eliminate your credit card balance(s), along with accompanying interest charges.

Pay off the monthly statement balance

The best way to avoid paying credit card interest is to pay the full balance on the card each month. But if you pay at least the statement balance due — which doesn’t include purchases made after the statement date — you still won’t be charged interest on the remaining amount unless you don’t pay the entire balance due on that statement.

On the next month’s statement, you must pay the next statement balance due, which will include that remaining amount, to avoid being charged interest.

Find out: How Credit Card Interest Works

Take advantage of the credit card grace period

Did you know that most credit cards also have a “grace period” of at least 21 days that can help save money on interest if you time your credit card purchases right?

A credit card grace period is the gap between your statement closing date and before your next monthly payment due date, typically about 21 to 25 days, if you’ve consistently paid your statement balance each month for several months.

During the grace period, you won’t pay interest on new purchases made after your last statement date. Instead, payment is due on the following statement.

For example, if your credit card billing cycle ends on June 15 and you charge a $200 new purchase on June 16, that new billing cycle won’t end until July 15. Then you’ll still have around 21 days until the next payment due date sometime during the first week in August to pay the statement balance to avoid paying interest on that $200 purchase.

Find out: How the Credit Card Grace Period can Save You Money

Transfer the balance to an introductory 0 percent APR card

When credit card balances and interest charges spiral out of control, transferring the balance(s) to a new credit card that offers a balance transfer 0 percent APR can save hundreds of dollars over time in interest. The card may also offer the same rate on new purchases, but don’t take the bait. You’re trying to pay off the balance, not increase it.

Before transferring credit card balances to a new card with a 0 percent APR, check the balance transfer fee in the card’s offer and/or terms and conditions. The transfer fee is typically three percent to five percent of the transferred balance.

Then compare those fees on a credit card interest to find out what you’d pay in interest over time to make sure the balance transfer works in your favor.

Find out: How to Transfer Credit Card Balances

Make more than one payment a month

Credit card issuers calculate credit card interest on a daily basis. So, if you pay down your balance with frequent payments in addition to the card’s payment due date, interest charged will be a lower amount. And any interest charged will be on a smaller balance amount.

If you get paid twice monthly make a payment from each paycheck to whittle down your credit card balance faster. Even better, every time you have a little extra money, make an extra credit card payment to knock your balance down to a manageable amount or pay it off entirely.

Find out: How I Paid Off $22,000 Worth of Debt in Less Than Two Years

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About the Author

Deb Hipp

Deb Hipp

Deb Hipp is a full-time freelance writer based in Kansas City, Mo. Deb went from being unable to get approved for a credit card or loan 20 years ago to having excellent credit today and becoming a homeowner. Deb learned her lessons about money the hard way. Now she wants to share them to help you pay down debt, fix your credit and quit being broke all the time. Deb's personal finance and credit articles have been published at Credit Karma and The Huffington Post.

Published by Debt.com, LLC