pay less interest on credit cards
avoid credit card interest
credit card interest
If you’re looking to minimize interest, here’s some information that can help you understand how credit card interest works and how you can avoid it.
What is credit card interest and how does it work?
Credit card interest is essentially the price you pay for borrowing money with your credit card. The interest rate is usually listed as a yearly rate called the annual percentage rate or APR.
Different types of transactions tend to come with different APRs. For example, your purchase APR will likely be different from your cash advance APR. Different types of transactions also come with different rules as to when interest is charged, so it’s important to check your cardholder agreement for specifics.
Ways to avoid credit card interest or pay less in interest
Utilize your interest-free grace period
When you make new purchases on a credit card without a balance carried from previous billing periods, those purchases may have a period when they don't accrue interest called a grace period. Grace periods are the time between the end of a billing cycle and the payment due date.
Pay off your balance entirely within the grace period, and you can avoid paying any interest on purchases. However, this only works if you pay off your statement balance in full each month by its due date.
Check the terms of your credit card agreement to find out what the grace period is and under what circ*mstances it applies.
Not every type of transaction gets a grace period. Balance transfers, for example, will typically not qualify for a grace period. Neither will cash advances.
Consider a low introductory APR credit card offer on purchases
One way to pay less interest is to take advantage of a low introductory APR offer on purchases. Cards with a low intro APR on purchases offer the low rate for a set period. Once the period ends, you’ll start accruing interest at the credit card’s regular APR for purchases on any purchase balance that remains as well as new purchases.
Consider consolidating debt with a low introductory APR balance transfer offer
A balance transfer lets you move a balance from one credit card to another.
Taking advantage of a low intro APR on balance transfers can give you a chance to pay off existing debt while accruing less interest. Once the introductory period ends, you’ll start accruing interest at the credit card’s regular APR for balance transfers on any remaining amount of the balance you transferred.
There may be a balance transfer fee for each balance you transfer (typically a percentage of the balance transferred or a dollar amount, whichever is higher). So, review the terms of the offer carefully..
Cards Offered by Citi
Citi offers several great credit cards, such as the Citi® Diamond Preferred® Card, the Citi Custom Cash Card, and the Citi Simplicity® Credit Card. These credit cards can give you financial flexibility all with unique features and benefits that allow you to make the most out of your credit cards.
Disclosure: This article is for educational purposes. It is not intended to provide legal, investment, or financial advice and is not a substitute for professional advice. It does not indicate the availability of any Citi product or service. For advice about your specific circ*mstances, you should consult a qualified professional.
FAQs
Ways to avoid credit card interest or pay less in interest
How to avoid being charged interest on a credit card? ›
If you'd like to avoid paying interest on your credit card, you have two options. You can pay off your balance before your grace period ends, or you can apply for a credit card that offers a 0 percent intro APR on purchases for a time.
How to get interest waived on credit card? ›
How to Waive Interest on a Credit Card. The best way to go about asking your credit card company to waive interest charges is to call customer service and explain the situation that caused the interest. Being late on a payment or only paying the minimum amount due will trigger an interest charge, for example.
How could you avoid paying interest on your credit card? ›
If you always pay your statement's current balance in full by the payment due date, you'll take advantage of any interest-free days which apply to your card, and avoid paying any interest on the purchases you make.
Can I ask my credit card company to stop interest? ›
With a hardship plan, your card issuer may agree to lower your interest rate, suspend late fees or reduce your minimum payment on a temporary basis. You might even be able to skip a few payments while you work to rebound from the financial setback.
How do I stop charging interest? ›
Can you help me get interest and charges stopped? Your creditors are more likely to stop or reduce interest and charges if you can prove you are in financial difficulty. We can help you make a budget which will show what you can afford to pay to your debts. Some debt solutions will stop interest and charges.
Which is the best strategy for paying your credit card bill? ›
Pay more than the minimum
If you pay the minimum balance on your credit card, it takes you much longer to pay off your bill. If you pay more than the minimum, you'll pay less in interest overall. Your card company is required to chart this out on your statement, so you can see how it applies to your bill.
How do I ask my credit card to remove interest? ›
While it can some time and effort and your request may be denied, it doesn't hurt to ask. Before making that call, be sure to gather any necessary information, including your credit card history, credit score and current credit card terms.
Can I ask my credit card for 0% interest? ›
You may be able to secure a 0% APR offer by requesting one from your credit card issuer. Offers are generally for balance transfers, but some issuers also offer pay-over-time plans or credit line loans. Using your card responsibly and negotiating a retention offer can increase your chances of getting a 0% offer.
Can credit card interest be forgiven? ›
Credit card forgiveness from credit card companies is unlikely. You may be able to negotiate with credit card companies for other debt relief, like creating a debt management plan. A debt consolidation loan can help you pay down credit card debt faster.
Pay your credit card bill in full every month
If you pay off every bill completely, you won't carry a balance into the next month, meaning you won't owe any credit card interest at all.
How do I offset my credit card interest? ›
Make multiple payments each month
Credit card issuers assess interest based on your average daily balance, not your balance at the end of the month. Paying more than once per month — say, every two weeks — will reduce that average balance and, with it, your interest charges.
Why am I being charged interest if I paid my balance? ›
What's residual interest on a credit card? Have you ever paid your credit card balance down and then found an unexpected interest charge on the next bill? That may be residual interest. Residual interest, also known as trailing interest is, in the most basic terms, the interest that's carried over billing cycles.
Will Citibank lower your interest rate? ›
Major credit card issuers such as American Express, Bank of America, Capital One, Chase, and Citi may lower your credit card interest if you ask for it. We'll discuss why it pays to negotiate your credit card's interest rate and how to do it. You might not get a lower interest rate, but it's always worth it to ask.
Can credit card interest be written off? ›
Credit card interest is not tax-deductible for personal expenses. The government stopped allowing a tax deduction for credit card interest in the 1980s. Interest on student loans, mortgages, home equity loans, and business expenses are still tax-deductible.
How to get credit card interest rate lowered? ›
Ask for a lower rate (or negotiate one)
- Research competitive rates from other card issuers before calling.
- Highlight your loyalty and good payment history with the company.
- Be prepared to mention any recent improvements in your credit score.
- If you've received offers from other card companies, mention these as leverage.
Residual interest, aka trailing interest, occurs when you carry a credit card balance from one month to the next. It builds up daily between the time your new statement is issued and the day your payment posts. Since it accrues after your billing period closes, you won't see it on your current statement.
Do I still get charged interest on my credit card if I dont use it? ›
Interest will accrue on a daily basis, between the time your next statement is issued and the due date, which means that you'll have an even larger balance due, even if you haven't used your card during that month.
Do you get charged interest if you pay minimum credit card payment? ›
Credit cards apply interest on your outstanding balance every month. So if you pay only the minimum amount, your outstanding balance will remain high. The interest on the outstanding balance will accumulate month on month, making your debts higher.
Is there a way to lower credit card interest? ›
The best way to avoid high interest charges is to pay off your credit card balances every month. If you want to ask your credit card issuer for a lower interest rate, gather info about your credit score, payment history and competing credit card offers before you call.
