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Lowering your credit card fees

Are you blown away by the interest you owe on your credit card each month? Here are some tips that will help you keep your interest fees down.

  1. Pay your total balance in full by the due date each month. It's the best way!
  2. Make a payment as soon as you can before the next statement comes out, when you can't pay your monthly balance on time. You'll save on interest charges, since they usually start from the date of purchase and until the balance is paid off in full.
  3. Get a low-interest rate credit card, especially if you don't pay off your balance each month.
  4. Get a line of credit and use it to pay off your balance in full each month. A line of credit usually carries an interest rate of about 10%, which is even lower than a low-rate card. You can save more than $200 in interest charges per year this way.
  5. Stop using your credit card if you never pay your balance in full by the due date.

On that note

Ask your financial institution to transfer your credit card balance to a lower interest line of credit or personal loan.

Find a way to cut back in your budget to be able to put larger amounts toward paying off your debt.

Find a way to earn more money. You just might have to find a second job to be able to repay your debts. The satisfaction you'll get from seeing the amount you owe go down from day to day will make it all worthwhile.

Prioritize your debts. You can repay them in 2 ways:

  • by starting with the ones with the highest interest rates first
  • by starting with the ones with the smallest amounts first

In either case, you'll have to make a list of your debts and save as much as you possibly can to eliminate them as fast as you can. It's up to you to determine in which order to repay them.

The first way is, logically, the one that pays off the most, since it allows you to rid yourself of the debts that cost you the most (the ones with the highest interest rates).

But perhaps you're someone who prefers smaller, more frequent victories. If so, the second way may be better for you. Here's why: by focusing on paying off your smallest debt first and seeing it paid off quickly, you'll be more motivated to take on the next.

The mind works in mysterious ways. As long as your way of doing it works for you, that's all that matters.

Once your debt is paid off, you can use the money that was going toward it to pay off the next debt on the list.

With discipline and determination, you'll keep your debt under control.

Watch out! It may be tempting but…

  • When you ask for a cash advance on a credit card, interest applies from the moment you get your cash until you pay it back in full.
  • If you don't pay your credit card balance before the due date on your statement, you will be charged interest on the full balance until you pay it in full.

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