With all the talk of Credit Card APR and interest rates, it’s easy to feel like you’re swimming in a sea of numbers. But there is light at the end of the tunnel! By following these 7 tips, you can get yourself out from under the pile of debt and into a position where you are actually saving money on your credit card.
Limit Your Credit Card Balance
To get the best possible APR for credit cards, you should limit your credit card balance to less than 30% of your credit limit. This is just a general rule and does not apply to all cards. Some cards have higher APRs for those who regularly carry a high balance on the card. Also, some credit cards offer rewards programs that will pay off in the long run if you use them responsibly and take advantage of their benefits.
Don’t Go Over Your Credit Limit
If you go over your credit limit, it’s likely to cost you a lot of money. However, if you’re lucky, the card issuer may only charge a small fee for exceeding your limit. If that’s the case, consider yourself lucky and move on.
If they don’t forgive the fee and charge an interest rate of 18% APR on all purchases made while your balance is over the top – then it’s time to get serious about paying off those pesky charges.
Make Payments On Time
The first step to getting the best APR is to pay on time. If you do not pay your credit card bill in full each month and make at least the minimum payment by its due date, your credit score will be negatively impacted. This could result in a higher interest rate being applied to your account.
Consider Setting Up Auto-Pay
Auto-pay is a great way to save money on your credit card. You’ll be able to do this by setting up automatic monthly payments, which can help you avoid late fees and interest charges by paying the balance in full. You should also know that some lenders may offer a discount if you set up auto-pay for your card’s minimum due payments every month.
Pay More Than the Minimum
The second tip is to pay more than the minimum.
You will reduce your overall interest payments if you can pay more than the minimum amount due on your credit card statement each month. If you make only the minimum payment, then it’s likely that your indebtedness will continue to grow, and even if you do manage to pay off some of what you owe over time, the accumulated interest charges will still be high.
Don’t Close Old Cards
When you close an old credit card, your credit score will take a hit. This is because the number of open accounts on your report will drop, and showing that you are responsible for managing multiple lines of credit is important to lenders.
Choose The Right Card For You
You should always check your credit card’s APR before applying. You should also choose a card with an APR that matches your financial needs. If you can’t pay off the balance monthly, look for a low-interest rate. If you’re looking to save money on interest and have a good credit history, consider applying for a balance transfer credit card.
And there you have seven tips that can help you get the best APR on your credit card. As the experts at SoFi recommend, “While credit cards can be a useful tool for managing cash flow (and even earning rewards and perks), it’s important to understand the costs involved.” As we’ve mentioned, there are a lot of different factors to consider when choosing a card, but these tips will definitely help you narrow down your options and find the right one for your needs.