3 Simple Methods To Save Money On Your Credit Card Purchases
In recent years, more and more people have begun to use their credit cards for everyday purchases instead of using their credit cards for special purposes. Commercials have been running for years trying to encourage people to use their credit cards for everyday purchases and many credit card companies have begun to offer rewards for using the credit card at the grocery store or the gas station. Credit card companies are willing to spend the money on advertising this because the more people use their credit cards, the more opportunities that the credit card company has to earn interest and apply finance charges to the purchases that have been made.
Always Pay Off Your Credit Card Balance
There are a number of ways that a consumer can use to reduce the amount of money that they are paying to the credit card companies each month and the most effective way is to pay off the balance of the credit card each month. Under the law, the credit card companies must give the person a grace period of at least 25 days to pay off the purchases that have been placed on the credit card before the balance of the card is subjected to interest and finance charges. If the balance that has been placed on the credit card is paid off within that time limit, then the company cannot charge the person for placing the purchases on the credit card and the person gets a 25 to 30 day loan for free.
Use The Credit Card Sparingly
Although the temptation to place a majority of your purchases on your credit card and forget about them can be very high, going this route will cost the person a great amount of money in the long run. In addition to the interest charges and finance charges, there is a good chance that the person will spend more with the credit card than they can afford to pay, will go over their credit limit triggering an over limit charge, or will carry a balance on the card which allows the company to charge higher fees for using the credit card. The best way to use a credit card is to only use the credit card for emergency purchases and to pay cash for everything else.
Pay The Bill As Soon As It Arrives
A significant percentage of the profits that credit card companies bring in each month are due to the number of accounts that they have charged a late payment charge to. These late payment charges can range anywhere from $25 to $39 per occurrence and are charged directly to the account, which will add to the balance amount that the person will be paying interest on. In some cases, the late payment charge causes the person to go over their credit limit which can trigger another charge of up to $39 which will also be added to the balance of the credit card. By paying the credit card bill as soon as it arrives, you will ensure that you will not forget about making the payment and the payment will not be mailed so late that the deadline is missed due to the pickup and delivery of the mail.
Great ways to save on the credit card bill and resist falling into severe credit card debt. I would recommend that my clients make it a regular habit to call their credit card holders to ask for a lower rate. I have one client who owes over $20,000 on a Visa that was at 18%. He spoke with a ‘rate specialist’, touting his rising credit score and declining balance and got his rate cut in half, from 18% to 9%! His monthly interest charge was instantly reduced by $150, which will help him pay off his debt even sooner.