#FinancialBytes: 5 ways to lower monthly credit card payment
What's the story
Credit cards are one of the widely-used cashless payment methods because of the convenience they offer.
People use credit cards for almost everything. However, it's essential to use credit cards wisely; spending carelessly might push cardholders into debt trap. Cardholders should try to clear off their credit card debt to lower their financial burden.
Here are 5 ways to reduce monthly credit card payment.
#1
Cardholders can reduce monthly payment by clearing outstanding amount
Credit card holders must avoid paying only the minimum due amount every month. Paying just the minimum amount does not decrease their debt or outstanding credit card balance; banks/card issuers would continue to charge high interest on the entire outstanding amount.
So, instead of paying the minimum amount, one must clear as much of the outstanding amount as possible to reduce the monthly payment.
#2
Control your expenditure, avoid high credit limit utilization
Some customers, especially those with bad spending habits, might get into financial trouble with credit cards. They tend to spend more using their credit cards than they usually would while paying with cash. Using credit cards for everything and high credit limit utilization will attract a higher monthly interest.
Cutting down on unnecessary expenditure can help customers lower the monthly credit card payment.
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#3: Customers should avoid cash withdrawals using credit cards
Also, credit card holders should know that cash withdrawals from ATMs using their credit cards attract very high interest rates apart from transaction fees. So, customers can reduce their monthly interest and thereby monthly credit card amount by avoiding cash withdrawals.
#4
Pay amount by due date to avoid extra charges
Also, when card holders default on their monthly credit card bill payments or not pay them before the given due date, it will attract unnecessary additional charges.
Banks or credit card providers can levy late payment fees and default penalty among other charges.
Avoiding late payments and default is a good way to reduce their monthly credit card payment.
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#5: Avoid maintaining too many cards
While credit cards are useful, maintaining too many can be a burden. If someone has too many cards, they will have to pay more every month, including minimum amount due, interest, other fees/charges. To decrease the monthly amount, one must avoid too many credit cards.