Question

Discus or list what can be done to save on interest charges for a credit card loan of $5,595.00 and interest of 25.15% for 2 years

Answer 1

There are 6 steps you follow to save on interest charges on credit card loan -

1.pay the credit card outstanding amount on due date

Try making full payment on the due date so that interest cost is nil. In order to keep the interest cost on credit cards at bay, pay the outstanding amount in full by the due date.

2.no interest free period on purchase:

Unless, your outstanding amount is cleared, avoid making fresh purchases on the card to keep the interest cost lower.

3.go for balance transfer:In such a scenario, one may go for 'balance transfer' (BT) facility, which is possible only if one holds more than one card. The card limit up to the amount availed as BT, however, gets blocked once the facility is used. Using the facility, one may transfer the outstanding amount to another credit card at a reduced interest rate in the range of 1 percent to 1.77 percent a month. "Balance transfer is the process of transferring your debt from one credit card to another. Objective is to save on in ..

There will, however, be processing charges which is generally 1 percent of the BT amount. At times, card issuers offer zero-interest BT facility. "Zero interest offers are temporary and usually last between 3 to 12 months. It is important to repay the balance within the time frame", says Jeet. If you are thinking transferring the balances across various credit cards, Jeet has a word of caution for you: "It is important to consider that frequent credit card balance transfer or higher outstanding balance on card will impact your credit score.

4.Convert to EMI:There can be two types of EMI conversion facilities. The first is the merchant EMIs that a merchant offers when you buy a particular product using your credit card. Alternatively, your credit card issuer may offer you an EMI option on certain high-ticket purchases you have made using your credit card. These are popularly known as EMIs on call.

5.deposit cash withdrawals back at earliest.putting the amount earliest will help you to avoid paying higher interest rates.

6.Avoid using credit card abroad:you can use a forex card while travelling abroad.for better pricing and keeping overall cost at bay.