Three Ways I'm Avoiding Credit Card Interest

Like most people, I have several credit cards that I use regularly. These cards earn me shopping discounts, rebates, discounted gas, and other perks (such as free shipping) which saves me hundreds of dollars a year. Regular credit card use also keeps my accounts active and boosts my credit score, which means lower interest on home loans and other finance packages.

Where people get into trouble is by overextending themselves on the credit cards. Balances that can't be paid within the billing cycle are subject to interest charges of 1-3% a month. With these kind of rates, it only takes a few months to cancel any savings that you may have earned.

How I manage my credit card debt is to pay off the balances before interest has a chance to accrue. Here's three ways how I'm avoiding credit interest; these methods will work for you as well.

Pay the balance off at the register.
Some of my favorite department stores routinely offer their preferred customers (ie card holders) discounts of 15-20% if we use the store's own charge card to pay for our merchandise. To earn the discount without paying interest, I'll charge the purchase at the register, and then immediately pay off the balance at the customer service counter.

Pay the balance off before the due date.
Credit card interest does not start accumulating the moment a charge is made. Instead, the charges accumulate -- interest free -- during the month until they are posted to your account. Once the statement arrives in the mail, you'll have additional time (called the grace period) until payment is due.

As long as we pay off the balance due before the payment due date, this short term loan is interest free. Carry the balance over to the next month, however, means we will be charged interest on any remaining balance.

Check for available 0% interest promotions.
My credit score is 844 which means that credit card companies are forever trying to entice me with 0% interest offers. While some of these offers come with strings attached (such as 5% processing fees), a few companies are still offering fee-free 6 month 0% introductory rate for new card holders.

I've discovered that these 0% promotions are great for larger purchases that may take several months to pay off in full. The secret here is to read the fine print to make sure that the offer is truly interest free, and not just deferring interest which will come due once the promotion is over.

More by this author:

Sneaky new credit card fees to watch for.
How to get a lower interest rate on your credit card.
Consumer tips for avoiding credit card fees.