It’s always a delight to have the credit card as it helps do a lot of things such as booking of bus, train and air tickets; payment of telephone, mobile and electricity bills; payment of insurance premiums; dining at restaurants; and plenty more. But people generally remain unconscious of the hazards that credit cards can bring if not used properly. Yes, we are talking about the mounting bills on the credit card that happen due to lack of judicious purchase. The bills do not only include the costs of what purchase through the credit card but also the interest charges, which range from 30%-45% per annum in India. You need to be cautious of your purchase and follow simple ways to reduce interest payment on your credit card bill.
Try to pay the maximum amount every month
Paying the minimum due on credit card each month can be a big mistake as you could end up paying huge interest amount by continuing with more debt. Therefore, you should look to pay the maximum amount every month to shorten the period of payment and thus reduce the interest substantially on the bill.
Don’t wait till the due date
Don’t wait till the due date to make payment of your credit card bill. Do make the payment of credit card bills on the day when your salary comes so that you can start reducing your interest payment from that day itself. However, one could argue that their salary comes after the due date of credit card payment. In that case, you can ask the bank to reschedule your payment due date according to your salary credit date.
Take cheaper loans
If you are struggling to pay the due amount on credit card, then you can opt for cheaper loans like personal loan, loan against property or even loan against gold with interest rate of 11%-20%, 11%-15% and 11%-26%, respectively. These are much lower than 30%-45% charged on credit card.
Convert dues into EMIs
You can get the option of Equated Monthly Installments (EMIs) to pay back your credit card dues. Interest charges on EMIs come to about 18%-25% for existing customers. But, you must ensure to pay on time else the interest rate will shoot to the original level of 30%-45%.
Do not shop with credit card on which payment is overdue
Don’t make purchases on the credit card for which you have not made the payment even after the due date. More purchases will accentuate the interest burden as you can’t avail interest-free credit period if you roll over the payment.