The Ultimate Guide to Credit Cards
Saturday, January 28, 2023

6 Ways to Save on Credit Card Interest Fees

Ways To Save On Credit Card Interest Fees

credit card advice

Andrea Woroch

Written by: Andrea Woroch

Andrea Woroch

Andrea Woroch is a nationally recognized consumer finance expert, writer, and TV personality who is passionate about helping families find simple ways to spend less and save more without making major sacrifices. Her practical budgeting and savings advice has helped millions of Americans initiate real financial change so they can stress less and spend more time doing the things they love. As a go-to media expert, Andrea has appeared on popular TV shows such as Today, Good Morning America, FOX & Friends, Dr. OZ, CNN, and MSNBC. Her work has been featured in the The New York Times, USA Today, Forbes, Reader’s Digest, Cosmopolitan, Money, Time, Woman’s Day, Yahoo, among other outlets. Andrea hosts a monthly money segment on KTLA Morning News in Los Angeles.

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Edited by: Lillian Guevara-Castro

Lillian Guevara-Castro

Lillian brings more than 30 years of editing and journalism experience. She has written and edited for major news organizations, including The Atlanta Journal-Constitution and the New York Times, and she previously served as an adjunct instructor at the University of Florida. Today, she edits all CardRates content for clarity, accuracy, and reader engagement.

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Advertiser Disclosure

A credit card can be a helpful financial tool when used wisely. These plastic forms of payment make it easy and convenient to pay for goods and services so you don’t have to carry cash. They offer robust reward programs so you can earn cash back, free flights, and hotel stays for all your purchases. 

Some cards even offer multiple layers of protection, including fraud alerts, extended warranties, extended return windows, and travel insurance. What’s more, you can use credit cards to establish a credit history and build a healthy credit profile. Having a credit card has its perks, but they come with some potential risks, too.

Anyone who fails to pay their entire bill by the due date or carries a revolving balance from a previous statement will have to pay interest on that unpaid balance. Unfortunately, 40.7% of credit cardholders carry a balance from month to month, as reported by the American Bankers Association’s Credit Card Market Monitor report.

As interest accumulates, paying off your credit card balance can become harder. The longer it takes for you to pay off your balance, the more you can expect to pay as you will pay interest on interest. As interest fees pile up, it will become increasingly difficult to pay down the balance, which is how consumers go into debt. 

The best way to manage your credit card and save money is to avoid paying interest fees

Considering the average credit card balance in the U.S. hovers around $5,525, according to Experian, a lot of cardholders are throwing away money on interest each month. Avoiding interest is your ticket to improving your finances and saving money, and it may not be as difficult to do as you may think.

Here are six ways to avoid paying credit card interest fees.

1. Don’t Carry a Balance

There’s a common myth about credit cards that has a lot of people believing that carrying a balance from month to month will improve their credit score. The reality is that carrying a balance means you will waste money on interest, and it could potentially damage your credit rating. 

That’s because carrying a balance increases your credit utilization rate — or the amount of credit you’re using versus how much you have available — a figure that credit reporting agencies and lenders use to assess your borrowing risk. Paying off your balance in full will save you money on interest and help improve your credit. 

FICO Credit Scoring Factors
The amount of debt you owe accounts for 30% of your FICO credit score. The lower your credit card balances, the better it is for your scores.

If you’re struggling to pay off your balance in full each month, it’s a clear indicator that you’re living beyond your means, and you have to make adjustments to your monthly spending.

2. Pay Bills On Time

You will incur a late fee if you don’t make at least the minimum payment by the due date, but that’s not the worst of it. If you skip two payments in a row, your credit card issuer may raise the interest rate on your current balance and on any new purchases. And don’t forget the damage to your credit score overdue payments will garner.

Considering the average penalty interest rate can be as high as 29.99%, missing a payment will cause you to spend even more on interest fees. While it’s possible to negotiate this rate back down after maintaining consistent on-time payments for at least six months, such high penalty interest rates make it even more expensive to carry a balance. 

Over time, you will pay more in interest, and it will take you much longer to pay down your debt. 

3. Look For No-Interest Intro Offers

Opening a new credit card is an easy way to dodge interest fees, especially if you’re planning to buy a big-ticket item and need some time to pay it off. That’s because many credit cards offer introductory promotions for new members that waive interest on purchases for a period after account opening, usually anywhere from 15 to 21 months. This gives you more flexibility to pay down the balance without raking up interest fees. 

Some cards even allow you to earn rewards on those purchases as well. The following three cards are our top-rated offers with no interest on new purchases for more than a year:

BankAmericard® credit card Review

at Bank Of America’ssecure website

0% INTRO APR RATING

★★★★★
4.9

OVERALL RATING

  • New longer intro period! 0% Introductory APR for 21 billing cycles for purchases, and for any balance transfers made in the first 60 days. After the intro APR offer ends, 16.24% – 26.24% Variable APR will apply. A 3% fee (min $10) applies to all balance transfers.
  • No annual fee.
  • No penalty APR. Paying late won’t automatically raise your interest rate (APR). Other account pricing and terms apply.
  • Access your FICO® Score for free within Online Banking or your Mobile Banking app.
  • Contactless Cards – The security of a chip card, with the convenience of a tap.
  • This online only offer may not be available if you leave this page or if you visit a Bank of America financial center. You can take advantage of this offer when you apply now.
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
0% Intro APR for 21 billing cycles for purchases
0% Intro APR for 21 billing cycles for any balance transfers made in the first 60 days
16.24% – 26.24% Variable APR on purchases and balance transfers
$0
Excellent/Good

Additional Disclosure: Bank of America is a CardRates advertiser.

Chase Slate Edge℠ Review

at Chase’ssecure website

0% INTRO APR RATING

★★★★★
4.9

OVERALL RATING

  • Start off strong with 0% Intro APR for 18 months from account opening on purchases and balance transfers. A variable APR of 19.24% – 27.99% on balance transfers and purchases after the introductory period ends.
  • Lower your interest rate by 2% each year. Automatically be considered for an APR reduction when you pay on time, and spend at least $1000 on your card by your next account anniversary.
  • Raise your credit limit. Get an automatic, one-time review for a higher credit limit when you pay on time, and spend $500 in your first six months.
  • All for no annual fee – You won’t have to pay an annual fee for all the great features that come with your Slate Edge℠ card
  • Keep tabs on your credit health – Chase Credit Journey helps you monitor your credit with free access to your latest score, real-time alerts, and more
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
0% Intro APR on Purchases 18 months
0% Intro APR on Balance Transfers 18 months
19.24% – 27.99% Variable
$0
Good/Excellent
Bank of America® Unlimited Cash Rewards credit card Review

at Bank Of America’ssecure website

0% INTRO APR RATING

★★★★★
4.8

OVERALL RATING

  • $200 online cash rewards bonus after you make at least $1,000 in purchases in the first 90 days of account opening.
  • Earn unlimited 1.5% cash back on all purchases.
  • If you’re a Preferred Rewards member, you can earn 25%-75% more cash back on every purchase. That means you could earn 1.87%-2.62% cash back on every purchase with Preferred Rewards.
  • No annual fee.
  • No limit to the amount of cash back you can earn and cash rewards don’t expire.
  • New longer intro period! 0% Introductory APR for 18 billing cycles for purchases, and for any balance transfers made in the first 60 days. After the intro APR offer ends, 18.24% – 28.24% Variable APR will apply. A 3% fee (min $10) applies to all balance transfers.
  • Contactless Cards – The security of a chip card, with the convenience of a tap.
  • This online only offer may not be available if you leave this page or if you visit a Bank of America financial center. You can take advantage of this offer when you apply now.
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
0% Intro APR for 18 billing cycles for purchases
0% Intro APR for 18 billing cycles for any balance transfers made in the first 60 days
18.24% – 28.24% Variable APR on purchases and balance transfers
$0
Excellent/Good

Additional Disclosure: Bank of America is a CardRates advertiser.

It’s worth noting that anyone who misses a payment may trigger a penalty APR, which could mean losing that promotional 0% introductory offer.

4. Avoid Cash Advances

Credit cards are a convenient way to pay for goods and services, but did you know you could use your card to get cash from an ATM? Referred to as cash advances, cardholders can use their credit cards like a debit card when they’re in a crunch and need cash quickly. 

Although this sounds like a helpful perk, it comes with a catch: If you use your card for a cash advance, the issuing bank will slap you with a high interest rate and a cash advance fee on top of any ATM withdrawal fees. 

Cash advances do not receive an interest-free grace period as purchases do, and the interest starts accruing immediately on the amount you withdrew until it’s paid back.

Using your debit card to pull money out of an ATM is the best solution to avoiding cash advances. But if you don’t have a debit card on hand and need cash quickly, consider alternative payment options such as a digital money transfer app like Venmo, Zelle, or Apple Pay.

5. Transfer Your Balance

If you’re struggling to pay down your credit card debt, the fastest way to stop paying interest is to transfer your balance. Many credit cards that offer 0% APR on new purchases may also waive interest on qualifying balance transfers so you have more time to pay off your transferred balance without worrying about interest piling up. 

The following cards are our top-recommended balance transfer offers:

Discover it® Balance Transfer Review

at Discover Card’ssecure website

0% BALANCE TRANSFER RATING

★★★★★
5.0

OVERALL RATING

  • INTRO OFFER: Unlimited Cashback Match – only from Discover. Discover will automatically match all the cash back you’ve earned at the end of your first year! There’s no minimum spending or maximum rewards. You could turn $150 cash back into $300.
  • Earn 5% cash back on everyday purchases at different places each quarter like Amazon.com, grocery stores, restaurants, and gas stations, up to the quarterly maximum when you activate. Plus, earn unlimited 1% cash back on all other purchases – automatically.
  • Discover helps remove your personal information from select people-search websites. Activate by mobile app for free.
  • Every $1 you earn in cash back is $1 you can redeem.
  • No annual fee.
  • Click “Apply Now” to see terms and conditions.
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
0% Intro APR for 6 months
0% Intro APR for 18 months
16.24% – 27.24% Variable APR
$0
Excellent/Good

0% BALANCE TRANSFER RATING

★★★★★
4.9

OVERALL RATING

  • 0% Intro APR for 21 months on balance transfers from date of first transfer and 0% Intro APR for 12 months on purchases from date of account opening. After that the variable APR will be 17.24% – 27.99%, based on your creditworthiness. Balance transfers must be completed within 4 months of account opening.
  • There is a balance transfer fee of either $5 or 5% of the amount of each transfer, whichever is greater
  • Get free access to your FICO® Score online.
  • With Citi Entertainment®, get special access to purchase tickets to thousands of events, including concerts, sporting events, dining experiences and more.
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
0% 12 months on Purchases
0% 21 months on Balance Transfers
17.24% – 27.99% (Variable)
$0
Excellent, Good

Additional Disclosure: Citi is a CardRates advertiser.

BankAmericard® credit card Review

at Bank Of America’ssecure website

0% BALANCE TRANSFER RATING

★★★★★
4.9

OVERALL RATING

  • New longer intro period! 0% Introductory APR for 21 billing cycles for purchases, and for any balance transfers made in the first 60 days. After the intro APR offer ends, 16.24% – 26.24% Variable APR will apply. A 3% fee (min $10) applies to all balance transfers.
  • No annual fee.
  • No penalty APR. Paying late won’t automatically raise your interest rate (APR). Other account pricing and terms apply.
  • Access your FICO® Score for free within Online Banking or your Mobile Banking app.
  • Contactless Cards – The security of a chip card, with the convenience of a tap.
  • This online only offer may not be available if you leave this page or if you visit a Bank of America financial center. You can take advantage of this offer when you apply now.
Intro (Purchases)
Intro (Transfers)
Regular APR
Annual Fee
Credit Needed
0% Intro APR for 21 billing cycles for purchases
0% Intro APR for 21 billing cycles for any balance transfers made in the first 60 days
16.24% – 26.24% Variable APR on purchases and balance transfers
$0
Excellent/Good

Additional Disclosure: Bank of America is a CardRates advertiser.

Just make sure to use an online calculator and run some numbers to determine whether you can realistically pay off the balance before the promotional period expires.

6. Negotiate a Lower APR

Card issuers use several different factors, including your credit score, to determine the interest rates you’ll be charged — but they aren’t set in stone. Just as easily as a card issuer can increase interest rates as a penalty for missing payments, they can lower rates, too. 

Call customer service and see if you qualify for a lower APR.

You will have the most success negotiating a reduced APR if you have a positive history of paying on time and maintaining a low balance. It’s not a guarantee, but it’s certainly worth exploring, especially ahead of a big purchase that you plan to pay back over time. 

In this situation, a lower interest rate would help you save big bucks, so call customer service and ask. This isn’t the only scenario in which you should try to negotiate your interest rate.

In the event you missed a payment by a day or two due to extenuating circumstances and were charged interest and potential late fees, call customer service to find out if they can reverse those charges. Point out your positive account management history and card loyalty. Oftentimes, credit card companies are willing to issue a refund as a one-time courtesy.

Keep More of Your Hard-Earned Money

Using a credit card doesn’t mean you are destined to pay interest on your purchases. Employing smart spending strategies and following these tips can help you avoid unnecessary fees. This way, you can keep more of your hard-earned dollars in your own pocket.

Advertiser Disclosure

CardRates.com is a free online resource that offers valuable content and comparison services to users. To keep this resource 100% free, we receive compensation for referrals for many of the offers listed on the site. Along with key review factors, this compensation may impact how and where products appear across CardRates.com (including, for example, the order in which they appear). CardRates.com does not include the entire universe of available offers. Editorial opinions expressed on the site are strictly our own and are not provided, endorsed, or approved by advertisers.