8 Ways to Avoid Paying More Than What You Owe on Credit Cards

Does your credit card cost you more money than it should? Here is how to reverse that unfortunate trend.

woman choosing credit card
Updated June 6, 2024
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Americans are drowning in credit card debt. Credit card balances in the U.S. stood at $1.12 trillion in the first quarter of the year, according to the Federal Reserve Bank of New York.

Credit cards offer many benefits, such as helping you build a solid credit score, offering fraud protection, and giving you perks such as cash back points. But if you don’t use these cards well, you might spend hundreds or even thousands of dollars per year on interest and fees.

Here is how to avoid paying more than what you owe on credit cards so you can crush your debt and build your savings.

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Pay your balance in full each month

kkolosov/Adobe woman makes a purchase on the Internet with credit card

A surefire way to never pay more than what you owe is to pay off the entire balance on your statement each month.

When you do this, you will not owe any interest and can avoid unnecessary costs and start building your net worth. Paying off all your debt each month may also help your credit score.

Ask your lender for a better due date

Kawee/Adobe customer using credit card for payment at cashier

Call your credit card issuer and ask the representative to adjust your due date. Swapping the day your bill is due might help align the date with your payday, which can increase the odds that you will pay on time and in full.

However, if your lender allows you to change the due date, don’t expect that you can keep changing the date throughout the year. Your lender might limit how often you can make such a change.

Watch out for the end of promotional offers

Krakenimages.com/Adobe holding smartphone and credit card

Credit card promotional offers can be a great way to rack up rewards points or take advantage of a low interest rate when you make a big purchase.

Make sure to read the fine print, however. At the end of the promotional period, your interest rate could skyrocket. Put a reminder in your calendar to pay off the balance before the promotion ends.

Resolve $10,000 or more of your debt

Credit card debt is suffocating. It constantly weighs on your mind and controls every choice you make. You can end up emotionally and even physically drained from it. And even though you make regular payments, it feels like you can never make any progress because of the interest.

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Make a balance transfer to a zero-percent credit card

nenetus/Adobe using laptop while sitting on sofa

If you carry a large credit card balance from month to month, consider a balance transfer to a card that is offering a zero-percent promotional offer.

Take advantage of the promotional period to pay off the balance without accruing interest. It’s important to take steps to actually pay off all your debt on the card during this time. Once the promotional period ends, your interest rate likely will jump.

Don’t use cash advances

kite_rin/Adobe man holding credit card

Cash advances often come with hefty fees. Typically, the cash-advance fee starts at 5% or $10, whichever is more, according to Experian. But your lender might charge more.

On top of that, the annual percentage rate charged for cash-advance transactions is often higher than what you would pay for regular purchases.

Your lender also might start charging interest immediately. So, even if you pay off the advance in full by the statement due date, you might have accrued some interest that you will need to pay.

Say no foreign-transaction fees

Yakobchuk Olena/Adobe woman paying with credit card

If you travel internationally or purchase goods from international vendors, a card with foreign-transaction fees is going to cost you. These fees are charged in addition to any interest or other charges you owe and are usually around 3% of your purchase amount.

To avoid this fee, find a credit card that does not charge foreign transaction fees on purchases.

Make your payments on time

Maryia/Adobe black credit card with chip

Forgetting to make a payment can happen to any of us. But if you do this regularly, late fees can add up to hundreds of dollars per year.

Currently, the average late fee is $32, according to the Consumer Financial Protection Bureau (CFPB). However, the CFPB is finalizing a new rule that will lower credit card late fees to $8.

Still, it is best to avoid these fees even if they are reduced. Also, it’s possible that a late payment will result in your lender increasing the interest rate on your card.

Skip cards with annual fees

Johnstocker/Adobe pay for goods by credit card

Credit card perks can be a big draw for some customers. But beware of the fact that lenders sometimes charge high annual fees to help cover the cost of these perks.

These fees can start around $100 and might even go as high as several hundred dollars. Before you sign up for a card with flashy benefits, check to see if the card has an annual fee and determine whether the benefits outweigh the costs.

Bottom line

Africa Studio/Adobe Pile of credit cards

Inside the terms and conditions that come with your shiny new credit card is information about the interest and fees you might end up paying if you aren’t careful.

When used wisely, credit cards can be beneficial and can help you get ahead financially. To make the most of your credit card, read these terms and conditions and do what is necessary to avoid paying interest and fees.

Sign up for automatic payments, and try to pay off your balance each month.

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Author Details

Holly Humbert

Holly is a writer who recognizes that there isn't a one-size-fits-all approach to personal finance. She is passionate about entrepreneurship, women in business, and financial literacy. With more than four years of experience, her work has been featured on MarketWatch and The Ways to Wealth.