A high balance on your credit card teaches you the interest rate fees associated with this kind of debt. Annual percentage rates (APR) for credit cards in Canada are calculated based on compound interest – a calculation based on the initial principal as well as the interest rate already accumulated on your credit card. Some credit cards involve 29 per cent in interest rates if you fail to make a monthly payment.
It’s possible to find a credit card in Canada that offers a low APR or variable interest rate, however these types of credit cards are difficult to acquire when you have less than perfect credit. What’s worse, credit card companies can raise your interest rates and fees if you fail to make payments on-time and in full each month. If you’re constantly paying extra money in fees every month because of your credit card balance, these three hacks can help you avoid dealing with high interest rates.
- Pay Off Balance As You Use It
Paying off a credit card in full each month seems impossible to do because of high balances for some individuals. When you let your credit card debt build up, managing it can be a frustrating process. As credit cards are a form of revolving debt, which means money is available to use after you’ve paid it off, it becomes easy to lose control of credit card spending. With a credit card, you are able to make payments anytime that’s convenient for you.
When you make payments on your credit card debt after you’ve used it, you’re able to keep your balance down while also building your credit up. The best way to handle credit card debt is to pay the balance off in full each month. If you pay off your credit card while you spend, you’re more likely to pay off your card in full each month. Not only will this help build your credit, but it will also mean that in the future you’ll have a better chance of getting approved for loans with lower fees and rates. If you’re comfortable with online banking, consider setting up automatic payments to ensure that you never miss a payment.
- Know the Grace Period
It is the timespan between between a bill cycle ending a new cycle starting. If you’re not familiar with the grace period on your credit card, the best thing to do is to contact your financial institution or look at your online banking to see when your next credit card bill is due. Knowing when you can pay off your credit bill without interest can save you from having to spend extra dollars in fees. When you know the due date on your credit card payments, it makes it easier to monitor debt and make payments.
- Consolidate Credit Card Debt
If you have a lot of credit card debt on more than one card, consolidating your debts with a personal loan can save money on added charges and fees. Credit cards are a form of unsecured debt, which means they don’t need an asset to have, like auto financing or a mortgage. Although transferring your unsecured debts onto a loan with lower interest rates and fees could help you save money, it won’t erase your debts. You’ll still be required to pay back the full amount, but instead of having several cards each with different rates and fees, your debt will be combined into one loan with potentially lower fees.
Canada Auto Experts works with a lot of Canadians every day, ensuring they get quality vehicles easy and simple, regardless of their credit score. Getting approved for a car loan with bad credit can take several days, and even weeks, but Canada Auto Experts dealer partners work hard to get applicants the best vehicle and financing options fast. If you need an affordable vehicle and want to rebuild your credit, visit Canada Auto Experts right now to learn more. Alternatively, call 1-855-550-5565 to talk to credit specialist.