Paying the Full Balance

A lot of people think they can’t avoid interest charges on credit cards. However, by paying the full balance on your card each month you can reduce your credit card cost to that of the annual fee. You have to pay close attention to your transactions and the terms of your credit card in order to take advantage of this option.

Some people never think about paying the full balance on their cards because they believe that paying credit card interest is expensive but also inevitable. Fortunately with the inception of ‘Interest Free Day’ periods, it’s possible (and easily achievable) to never accumulate interest on your credit card purchases. That being said, many credit card owners do not fully understand what the credit card company means when they say interest free days.
Be sure, that there is a trick to using these interest free days effectively. You have to be just as savvy with your finances as the credit card companies are with their charges. See, they are smart enough to use words like, “up to 55 interest free days” by sliding in that phrase it lets you think you have all of those days free of interest when in reality the interest free only applies to you if you meet their requirements, the main one being paying off your full balance each month. See some of the leading 55 days interest free credit cards.

Why should I pay the full balance monthly if I get 55 days interest free?

• Although you gain ’44 or 55 days interest free’ on most credit cards, it comes with a catch: You must pay your full balance each month to redeem it. In theory, it almost doesn’t make much of a difference whether you have 44 or 55 days, as you have to repay your balance in full every 30/31 days.
• Coupled with a low fee credit card, the only fee you’ll have to pay on your credit card is the annual fee.
• The most popular credit card category that is used in conjunction with interest free days are low interest rate credit cards. Even if you exceed the grace period, you will not have accumulated much interest.
• In essence, if you get a card that has a low annual fee, and you pay your balance off each month it will only cost you that low annual fee amount each year. That could be even less if you manage to swing a no annual fee credit card.
• The exception to this lies in certain transactions, especially those deemed cash advances. Cash advances are usually not eligible for interest free days and will start gaining interest immediately. The best way to avoid this cost is to avoid cash advances whenever possible. 

Paying your full balance monthly gives you something you can almost never get, free loans. When you think about it you realise that spending on a credit card is really just borrowing money for the short term. When you pay that money back each month you have borrowed it for free. In addition, if your card offers rewards you can actually get something for nothing. Just be careful about your spending because it is easy to overspend on plastic. Never spend more then you make and pay off your balance each month to truly benefit from credit card ownership. Compare low interest rate credit cards.