5 Ways to Reduce Credit Card Interest
At Latitude, we help Australians purchase all sorts of things, from shiny red cars to unforgettable holidays to socks with spots. Wouldn't it be smarter if you paid less interest on those purchases and had more money for yourself? To help you, here are five ways to pay less interest.
1. Pay off the full credit card balance, each month
This tip is the biggie, the one your accountant would tell you. To reduce interest charges, try to pay your statement's closing balance each month.
Let's get there together. Download the free Latitude App to track your balances, reminding you to stay on top of it all.
2. Set up a payment plan
Setting goals is easy but reaching them can be tough. You need a partner in money who will give you timely reminders and the option to set up a direct debit plan. This can help you stick to your goal, pay off debt sooner and ensure you don't miss your minimum monthly payments.
3. Try to pay more each month
Let's face it, paying the minimum payment each month on your credit card is the slowest way to pay off your debt. But, by paying more than the minimum monthly repayment, you can pay off your credit card faster and pay less interest. Check out the ASIC Credit Card Calculator to see the potential savings. You'll be amazed and motivated, all at once.
4. Let's. Stop. Adding. To. Your. Debt.
This tip is so important it's worth saying slowly. Try to limit your spending to the essentials. If you don't, by continuing to spend on your card, your debt will increase, as will the repayments, the time to pay off your account and the amount of interest you might pay.
5. Create a budget
Budgets are exciting (sort of). ASIC even shows you how to create a budget on its website. Then check our handy budget calculator where you can input your salary, living expenses, credit cards (if any), transport costs and so on. You'll have a summary of what your expenses and surplus can be all year round.
So, there you have it, five tips to reduce interest on your credit card. Why not stick this to your fridge as a reminder to help you save money each month?