Money & Banking
How to avoid credit card interest charges
Credit card users looking to avoid interest fees can do so if they’re smart about the way they use their card.
Credit card interest rates remain on average at 17.28 per cent, and the nation’s credit card balance has climbed an exorbitant $52.5 billion – and nearly two thirds of this is accruing interest.
Financial comparison website Mozo found that the average card balance is $4400. If users can’t clear their debt in full, they get stung with a $63 in monthly interest charge. And that’s certainly adds up– to about $700 per year!
However, there are some simple tips to avoid paying interest.
- Use interest-free days – There are seven cards on the market that have interest-free days spanning 62 days or the equivalent of nine weeks.
- Check out balance-transfer deals – Transfer one card debt to another to make use of the lengthy interest-free honeymoon period of up to 24 months. But you have to ensure you pay of your debt during this time.
- Set reminders – Make sure you know when your payments are due. Set up a direct debit so you know your balance will always be paid.
- Beware of promo offers – Read the fine print carefully as many of these promotional cards revert to higher interest rates once these periods end.