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Friday, December 2, 2022

7 top tips to use credit cards without paying interest

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A large number of people prefer to use the credit card when they buy something. Find out 7 top tips to use credit cards without paying interest.

Credit cards are a modern financial tool that should be utilized wisely in order to maximize their benefits while avoiding the downsides.

In some ways, they are similar to knives in that it would be foolish not to utilize a knife for its intended use, such as chopping fruits. It’s only a matter of being cautious, and if you don’t and end up getting harmed, it’s not the knife’s fault!

Here are 7 top tips to use credit cards without paying interest:

1. Pay off the full amount:

On your credit card bill, you should see two amounts: the total amount owed and the minimum amount. If you don’t want to pay 40% interest on your bill, disregard the’minimum amount due.’ The only figure that matters is the entire cost, which you must pay in full.

This is a non-negotiable guideline, and if you’re feeling rebellious and don’t want to follow all seven rules, at least follow this one.

2. Plan ahead of time your bill:

A monthly credit card statement does not have to be a surprise. Instead of spending carelessly and then living in tension until you pay off the bill, figure out how much you can realistically pay off and only spend that much on the card. Of course, this does not have to be exact to the decimal point, but you should have a general idea of how much you’ve spent at any given time. There are now apps for tracking this, so there are no excuses.

3. Only mandatory expenses:

We all have expenditures that we have to pay every month, no matter what. These are typically payments for utilities, groceries, or transportation. Use your credit card exclusively to pay for necessities. Then there are the expenses that occur only once a year or every few months, such as insurance premiums or healthcare costs. These are the only charges you should make on your credit card.

There’s a rationale for this seemingly arbitrary rule: it’s been established that when using credit cards rather than cash, shoppers spend substantially more (up to 100% more, according to one research). As a result, the only expenses on your card should be those with no possibility of overspending.

4. Maintain a record of your due date:

Unlike other invoices, which are typically created on the first of each month, your credit card bill is unique to you. While one person’s may be generated on the 7th of the month, another’s may be generated on the 15th.

You don’t want to be one of the legions of people who have had to pay interest and penalties simply because they missed their due date.

A monthly reminder on your phone would be enough to keep you from falling into this trap.

5. Don’t be daring when paying:

If you pay on the due date, you’ll be flying dangerously close to the sun. Digital transactions fail all the time, but if this one does, you’ll be the one on the hook. Maintain a buffer of at least a few days before the due date so that you can be confident that the bill has been paid off.

Then, if there are any unpleasant surprises, you can simply try again without worrying about missing the deadline.

6. Enable auto-pay:

Do you have a foolproof method for never forgetting to pay off your credit card? The autopay feature is a handy little tool that, in my opinion, is vastly underutilized.

By setting up autopay with your bank to pay your credit card account, you will avoid missing the due date. A credit card autopay is essentially a standing command to your bank to pay off your credit card debt. You can choose how many days before the due date you want the bill paid.

You can also choose the amount over which you want to be consulted before proceeding with the payment. Anything less than that is instantly repaid. It’s really that simple. You don’t have to remember the due date; in fact, you don’t even have to remember that you have a bill to pay.

7. Do not save your credit card:

You know that small little checkbox that begs you to save your credit card information on your favorite shopping apps? Don’t be taken in by it. You can save your credit card on your supermarket delivery app, but what about Amazon and Nykaa?

That’s a recipe for disaster. If you do use your card for online purchases (contrary to the third rule), allow yourself at least 30 unpleasant seconds to locate your card and enter in the details every time you buy something. It might well spare you from a colossal cost that you’ll never be able to pay off.

It sounds like a dream existence to whip out a gleaming credit card to pay for your gourmet lunch without having your hard-earned money deducted from your bank account. However, the chickens do come home to roost when you’re required to pay off the entire amount – or face sliding into the deep, dark hole of paying (or attempting to pay) usurious interest rates.

However, there is no need to eschew credit cards entirely. Contrary to popular belief, there are methods to utilize credit cards and take advantage of everything they have to offer without paying a single penny in interest.

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