While extremely convenient, credit cards can be a very costly consumer product. Many people do not know that using credit card can be very expensive on their pocket if they do not use it wisely. Each year many big spending credit card consumers can throw hundreds or even thousands of dollars out the window using credit cards. Even though you do not use credit card much but still you can save hundreds of dollars each year with these 3 credit card tips.
Pay more than the Minimum Payment
Your credit card company always tell you that there is a minimum payment amount. Even if you owe thousands of dollars, your minimum payment can seem extremely low, sometimes only 3% of your total balance. However, what the credit card companies do not tell you is that if you have a large balance and only pay the minimum payment for the next few years you will cost yourself possibly thousands of dollars in interest costs alone. In fact, that purchase at the record store for $50 over time will double. To avoid paying interest only and never touching the principle make sure you always pay more than just the minimum payment.
Transfer Your Balance to a Lower Interest Credit Card
Many people receive several credit card offers each month and most have some very seductive interest rate offers from different companies. For instance, many credit card offers will change your existing high interest rate credit card for free to the new card and allow you either zero percent interest for 3 months or a very low interest rate for a fixed period of time. If you have a high balance in which you pay hundreds of dollars each year on interest payments, in many cases it is in your best interest to accept these offers and enjoy zero or low interest for the next 6 months to a year.
Use Credit Card rarely but you can use Debit card in place of it
It is no surprise that many times we use credit cards out of habit. But why use something that is so expensive when we do not need to. We can easily pay for that meal or fill up our car with gas with our debit card and not pay any high interest fees. Why not use debit cards when they are just as convenient as credit cards. Use your debit card to avoid high interest fees in the long run and you can literally save hundreds in interest fees each year.