Finance charges are the late fee that you are making to your credit card company for not paying the bill on time. Most of the companies offer you a grace period of 21 days, and you need to make sure that you pay the bill before the grace period. Don’t try to pay only the minimum then you will have to pay a lot of interest, and this will take you so much time.
The following are some of the things you can do to avoid finance charges:
Pay your bills at the right time:
One of the best methods to avoid fees is to pay the bills on time. Make it a habit of paying your credit card bills every month and if you have a budget, set apart an amount of money for credit card bills so that you will not spend it on anything else. Also, do not use your credit card for everything; try to use it only during emergencies. Paying your bills on time will also increase your credit score.
Always make sure to check the grace period that is offered by your credit card company. Most companies have grace periods have grace periods of 20 to 25 days. Even if you are not able to pay your bills on time for some reason, you can pay it during the grace period.
Clearing off the balance on your card:
If you are not able to make the payment within the grace period, you can consider changing or transferring your balance into another card which has a lower ARP. When you clear the balance and more it to a card which has a low ARP, you will be paying a lesser amount.
Read all the instructions for getting the credit card:
It is very crucial for you to read all the small prints before you get the credit card. Before activating your card, you need to make sure that you understand all the terms and conditions. Do not blindly get a credit card and end up paying more interest and other fees every month. Check with the company if there will be a rise in the interest rates as days go by or if you will have to pay other fees or charges.
Sometimes, the best way to avoid such high-interest rates and fees is to pay the bills properly on time. If you do not pay the bills on time, you will always have to face some consequences. Have a budget and try to make your purchases as per your budget. If you think you cannot afford something, then do not buy that product. Try to avoid using your credit cards wherever possible and use it only when you are in an emergency.