Best ways to pay less credit card charges

For those who run a balance on a credit card, paying interest might seem like a fact of life. But that’s not the case, especially if you’re paying the sky-high rates that many credit card providers charge.

One credit card fact that’s surprising to some: interest charges typically aren’t based on your statement balance. Most card issuers charge interest based on your daily balance instead.

Daily interest is usually calculated by taking the APR on the card and diving by 365. Multiply your balance on each day by that value, add up the results, and you’ll get your total interest for the month.

For purchases, there is a grace period, but that only applies if you pay your statement balance in full. If you don’t, you’ll be assessed interest.

To save on interest if you don’t pay your bill in full, keep your daily balance as low as possible. That way you’re not assessed as much interest as you would if you waited until your statement due date.

Along with paying sooner, more frequent payments will keep your daily balance lower, too. Most card issuers allow you to make payments multiple times a month.

Consider making a payment each week or twice a month, even if it’s just a partial payment of your balance. Again, you’ll benefit by keeping your daily balance lower.

Paying more frequently might help with budgeting, too. Instead of running up huge balances and hoping you have enough in your checking account, paying more frequently will help keep balances low.

Keep in mind that many of these cards require a good or excellent credit score, so don’t waste your time or potentially damage your credit by applying for cards if you don’t have the credit score to match.


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