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How to reduce credit card finance charges

There are ways to save money on the costs of finance charges on your credit cards.

Tips to lower costs

Make sure you card has a grace period, usually 20-25 days if you pay in full every month you will pay no interest.

Change to a lower rate card. If you have a $1,000 average balance on your 18% credit card it will cost you more than $180 in interest over one year. If you switch to a 14% rate card you will save about $40.

Ask your card issuer to lower your rate. If you have good credit and pay on time they will do this every 6 months or so but you have to ask.

Pay your bill in full on time

Pay more than the minimum balance. The minimum balance is deliberately designed by the card companies to cost you the most money. Always pay more, even $25 makes a big difference. Make sure that they credit the extra to the principal not the next billing cycle

Pay as soon as you receive the statement. The sooner you pay the less finance charges accrue.

Pay twice a month! Easier on the budget and reduces your daily balance sooner.

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