The easiest ways to avoid interest on a credit card are to simply not make any purchases and to pay your bill in full by the due date every month. You can’t owe interest if you don’t buy anything, and even a card with zero balance reports positive information to the bureaus. Alternatively, if you make purchases and pay off the balance listed on your monthly statement by the due date, you’ll avoid interest thanks to the so-called grace period that most cards have. That basically means people who consistently pay their bill in full get an opportunity to do so before interest applies to their purchases.
But interest is most often a concern when you need to buy something now but won’t have all the money for a while. And in that case, the best way to avoid interest on a credit card is to get one with a 0% introductory APR.
Here’s how to avoid interest on credit cards:
Don’t make purchases, balance transfers or cash advances.
Not using your card guarantees no interest, as long as you pay any annual or monthly fees it may charge. And you’ll still have positive information reported to the credit bureaus each month.
- Schedule monthly payments for your full statement balance.
As long as you pay the full balance listed on your monthly statement by the due date, the issuer won’t charge interest. So it’s a good idea to set up automatic monthly payments from a bank account. That way, you won’t have to worry about forgetting. Just make sure your bank account balance exceeds the amount you charge.
Use a 0% credit card, and get out of debt before the regular APR kicks in.
Lots of credit cards offer 0% intro rates on purchases, balance transfers or both for a certain number of months after account opening. Your balance won’t accrue interest during that period, so long as you make the minimum payment each month. The regular interest rate will start to apply to any balance remaining at the end of the intro period.
If you’re in the market for a new card and need to finance a big purchase, getting a 0% card is the best option. If you already have debt, you can move the balance to a 0% balance transfer card and pay it off before the intro period expires. You can use WalletHub’s credit card payoff calculator to help you.