5 important ways to avoid paying interest on credit card debt

5 important ways to avoid paying interest on credit card debt

In the first five months of the current fiscal year, India witnessed a negative growth of 3% in credit card outstanding debt, which stood at more than Rs.1 lakh crore, the Reserve Bank of India confirmed. The reason can be attributed to slow economic growth as well as an increasing tendency of individuals to default on loans that propagate ‘buy now and pay later’ models.

However, such a scenario is easily resolvable if users take essential care to ensure timely credit card bill payment. Further, while they fail to pay such dues within due date, a hefty interest is levied for every day delayed. It eventually leads users to grave debt-traps, whereby overcoming it can take a substantial investment of time and finances.

Therefore, individuals need to understand how they can avoid paying interest on credit card debt. Here are some of the smart ways to do so.

Pay the outstanding amount in full before the due date 

While a credit card can be an incentivizing financial tool for the payment of big-ticket expenses, paying the outstanding amount before the due date is equally crucial. Furthermore, most financial institutions allow cardholders to pay the ‘minimum due amount’ if they cannot afford to make full credit card bill payments.

However, individuals should avoid this practice as the amount will be carried over to the next month. Consequently, they need to pay credit card interest on the unpaid balance. Moreover, if they fail to pay that minimum amount as well, additional late fees are also levied along with other charges.

Do not make new purchases until the existing debt is cleared 

Individuals who paid only a portion of the outstanding balance for a previous billing cycle would end up rolling over the remaining amount to the next billing cycle. Notably, it incurs a high credit card interest, soon resulting in surmounting debt.

Moreover, in this case, the typical interest-free period of a credit card billing cycle also does not work until users pay the full amount. Therefore, in that particular month with carried over bills, users will not be able to enjoy any interest-free period on any purchase.

Hence, to avoid these glitches, individuals first need to know how to reduce credit card interest and save money, starting right from making timely bill payments and in full.

Avail EMI option

Another excellent way to facilitate credit card bill payment without attracting a high daily interest is by converting high-end purchases into small EMIs. It will lower the interest burden to a great extent and will also help to clear the debts quickly.

The issuer thus allows cardholders to divide the bills into small EMIs, thus helping reduce the bill payment burden significantly.

Individuals can also repay a personal loan availed on the card limit into 3 EMIs without paying processing fees with the help of cards like the Bajaj Finserv RBL Bank SuperCard.

The card provider also brings pre-approved offers that simplify the credit application process and help save time. These offers are available on various financial products like personal loans, business loans, credit cards, etc. You can check your pre-approved offer by entering your name and contact number.

Deposit the ATM-withdrawn cash at the earliest 

Although individuals can withdraw cash from ATM during an emergency using a credit card, such cards not always come with an interest-free period. It means individuals need to pay high daily interest, a one-time charge, and other fees on the amount withdrawn till it is paid back. One can avoid paying such charges by minimizing ATM withdrawal.

However, selected credit cards also accompany an interest-free period of up to 50 days for ATM cash withdrawal.

Opt for a balance transfer 

Individuals can reduce the burden of outstanding credit card bill payments by opting for a balance transfer facility. However, in that case, one needs to possess another credit card to which such a balance can be transferred. Such transfer helps reduce the interest burden but is not provided by all card issuers.

However, frequently opting for this facility can affect the credit score of the cardholder. Therefore, it will be wiser to repay the credit card debt in time without any fail to avoid overspending.

These are some of the most crucial factors that individuals need to consider to make their credit card bill payment more straightforward and rewarding. However, the interest on outstanding credit card debt varies with different issuers that you might want to check before opting for a suitable card.


Thalla Lokesh is the founder of Technicalwebhub. He is an expert in Search Engine Optimization, and Social Media Marketing. He is a Professional Blogger. He has worked in Website Development, Blogging, Search Engine Optimization, and Online Marketing for the past couple of years.

Leave a Reply