How to Avoid Credit Card Interest Fees

I have been a credit card user for over two years now, and I have yet to pay a dime of interest. I absolutely despise credit card interest as mine is over 15 percent for the main card I use. That’s high. So from the moment I signed up until now, I have made a commitment to avoiding giving any amount of interest fees back to the credit card company. Here’s how.

1. I use my credit card like I use my debit card. And it’s as simple as that. This may be difficult because sometimes you really need something and may not actually have enough actual cash in your bank account to purchase it I withhold this urge and do without those things. I only pay for things with my credit card that I could also purchase, at that same time, with my debit card. This makes it easy to return all that money when the first bill comes and avoid interest. So why use a credit card, you ask? One is to build a solid credit history and the other is for the reward points.

2. I check my bill twice a week during each billing statement and keep my receipts for each transaction during that time. This ensures I know how much has been spent on the card and how much more I can spend. It also enables myself to prepare money to pay the full balance when the credit card bill comes in the mail. This eliminates pricy interest fees. It also keeps me constantly thinking about how I am using the credit card. After all, it’s not meant to be a blank check.

3. I set a budget for each billing period. And I don’t go over it. This ensures I can pay the balance in full when the bill comes and not be subject to interest costs. This takes financial discipline, but, in the long run, you’ll feel much better about yourself for staying within your spending capabilities. Usually my budget includes various bills, gas, travel and grocery fees. Find out what you need to buy in any given billing period, and set a reasonable budget for that time. Don’t include things you don’t need.

4. I don’t follow the credit card company’s payment plan. This is common sense. Of course the credit card company wants you to take your time returning that money. That’s so they can make interest. So when they set me up to pay just $17 each billing period for a balance of $2006, I clicked “Pay in Full”, stepping over their payment plan and stopping any interest accumulation.