How to Reduce Credit Card Costs

Making the decision to reduce credit card costs is a smart move. With little industry regulation the high interest rates and fees that credit card issuers charge can spell financial disaster. Follow the steps in the this article to reduce your credit card costs.

Difficulty: Moderately Easy

Instructions

1. Don't pay interest. Interest charges are what accrue when you fail to pay off the balance of your card each month. Interest rates on credit cards can reach 30% or higher. Avoiding interest charges involves two things: 1. Make sure you don't charge more each month than you can pay at the end of the month and 2. Make sure your payment reaches the credit card issuer by the due date.

2. Avoid late fees. As the banks who issue credit cards have been feeling the pinch, they have turned to fees as a way to make income from their card holders. Making sure your payment reaches the credit card issuer by the due date, not only helps you avoid paying interest charges, but helps you avoid late fees as well. Even a single late payment can also increase your card's interest rate as well.

3. Avoid exceeding your limit. Sometimes a charge is declined when the purchase will put a card holder over his or her credit limit. But sometimes the charge is allowed to go through and then the card holder is hit with a large fee for being over limit. Make sure you understand what your credit limit is and where you stand in relation to it to avoid paying this fee.

4. Don't use your credit card for cash advances. Often a card issuer will charge higher fees and interest rates for taking a cash advance. Avoid using your credit card like an ATM card, except for in extreme emergencies.

5. Read all fine print. Credit card issuers can change the terms of your contract with them at any time. Make sure you read all fine print on applications, monthly statements, and any other correspondence you receive from your credit card issuer.

6. Consider going credit card free. The best way to reduce credit card costs is not to use them. While some people use credit cards responsibly, many do not, or are caught by unaware by the fees and high interest rates that credit card issuers charge.

[Siouxmix]

on 2/4/2009 i can't wait till i pay off my credit cards!

[paint-it]

on 1/2/2009 Discipline is the key! Thanks...great article.