Paying interest on loans and credit cards is not an enjoyable experience. Interest on loans is impossible to avoid completely, but there are ways to bypass paying interest on some credit cards.
Firstly, before we tell you ways to avoid paying interest on your credit card it’s important to know that not all credit card products will allow you to do this. You are able save on interest if you have a credit card with an interest free period. There are cards which have up to 60 days interest free on purchases if the full amount is repaid within the time frame. This means, if you pay back what you use within the indicated time frame, you will pay 0% interest.
If your credit card does not have an interest free period you should consider a balance transfer to a card with interest free periods. Even if you have bad credit, there may still be options for you.
Tips to avoid paying credit card interest:
- Create a budget for what you can reasonably afford to pay within the interest free period. If your interest free period is 55 days, only spend what you can afford to repay in 55 days. This takes discipline. If you can repay what you spend in the interest free period you may end up paying $0 interest
- Set up direct debits from your everyday account to your credit card. If you know how much you spend, setting up weekly automatic direct debts means you may avoid paying interest.
- Only use your credit card for certain expenses if you have habits of overspending. For example, you might only use it once a month when you buy a new item for yourself such as a pair of shoes or a new dress.
If you are trying to clear credit card debt and you have a mortgage, talk to a broker to see if you can consolidate your debts into your mortgage. This will mean you can repay the total amount owing on your credit cards and make just one repayment into your mortgage.
For more information, call our friendly team on 1300 652 842. We can answer your questions and talk to you about solutions.