How to Avoid Finance Charges on Credit Cards
Pay off your balance at the end of every billing cycle., Determine if you have a grace period., Pay off the balance within your grace period., Consider transferring the balance to another card.
Step-by-Step Guide
-
Step 1: Pay off your balance at the end of every billing cycle.
The most straight-forward way to avoid charges on the balance of your credit card is to pay it off in full at the end of each billing cycle.
Paying off the whole balance by the due date on your bill will mean that you do not incur any additional finance charges on the balance.
Paying the balance of on time will also help your credit rating improve over time. -
Step 2: Determine if you have a grace period.
Once you receive your bill, you will often have a grace period in which you can pay it off without incurring charges.
These vary depending on what credit card deal you have, so you will have to check the details of your specific account.
The typical grace period tends to be around 25 days.
If your card does have a grace period, your card provider must give you at least 21 days after your bill is mailed for you to pay it off., If your card has a grace period, you must pay off the balance in full before the end of this period to avoid any finance charges.
If the grace period is 21 days, make sure you pay off the balance in advance of the due date.
You can make the payment up to 5pm on the last day without incurring charges.Make your payments in plenty of time so that you don’t accidentally miss the deadline.
If you mail your payment, allow 7 to 10 days for the payment to be applied to your account.
For online banking, check with your bank.
It can be the same day, or it can take three working days.
It’s best to be safe, so pay it off early if possible.
If you payment due date falls on a weekend it will be carried over to the next working day., If you are unable to pay off the balance within your grace period, there is an alternative way to clear the balance.
You may be able to transfer the balance to another credit card, with a lower APR.
For example, some cards will give you 0% APR for a limited time.
In this specified period you will not have to pay any finance charges, so you will be able to pay the balance off more cheaply.
If you are considering this, it is important that you are careful and conscientious with your finances.
After the 0% APR period expires you may have to pay a higher rate of interest, so you should be completely sure of the terms and conditions.
If you transfer the balance from one card to another, remember that you have not paid off the debt.
Don’t do this just to free up the card to take on more debt. -
Step 3: Pay off the balance within your grace period.
-
Step 4: Consider transferring the balance to another card.
Detailed Guide
The most straight-forward way to avoid charges on the balance of your credit card is to pay it off in full at the end of each billing cycle.
Paying off the whole balance by the due date on your bill will mean that you do not incur any additional finance charges on the balance.
Paying the balance of on time will also help your credit rating improve over time.
Once you receive your bill, you will often have a grace period in which you can pay it off without incurring charges.
These vary depending on what credit card deal you have, so you will have to check the details of your specific account.
The typical grace period tends to be around 25 days.
If your card does have a grace period, your card provider must give you at least 21 days after your bill is mailed for you to pay it off., If your card has a grace period, you must pay off the balance in full before the end of this period to avoid any finance charges.
If the grace period is 21 days, make sure you pay off the balance in advance of the due date.
You can make the payment up to 5pm on the last day without incurring charges.Make your payments in plenty of time so that you don’t accidentally miss the deadline.
If you mail your payment, allow 7 to 10 days for the payment to be applied to your account.
For online banking, check with your bank.
It can be the same day, or it can take three working days.
It’s best to be safe, so pay it off early if possible.
If you payment due date falls on a weekend it will be carried over to the next working day., If you are unable to pay off the balance within your grace period, there is an alternative way to clear the balance.
You may be able to transfer the balance to another credit card, with a lower APR.
For example, some cards will give you 0% APR for a limited time.
In this specified period you will not have to pay any finance charges, so you will be able to pay the balance off more cheaply.
If you are considering this, it is important that you are careful and conscientious with your finances.
After the 0% APR period expires you may have to pay a higher rate of interest, so you should be completely sure of the terms and conditions.
If you transfer the balance from one card to another, remember that you have not paid off the debt.
Don’t do this just to free up the card to take on more debt.
About the Author
Alexander Young
Dedicated to helping readers learn new skills in crafts and beyond.
Rate This Guide
How helpful was this guide? Click to rate: