💰Avoid extra fees: understanding card interest

Credit cards are super convenient, but if you're not careful, interest charges can sneak up and drain your wallet! Want to know how to avoid unnecessary fees and keep more money in your pocket? Here’s a quick guide to understanding credit card interest rates.

What’s Credit Card Interest?
In short, it's the price you pay when you borrow money from your credit card company and don't pay the full balance each month. This is called the APR (Annual Percentage Rate).

• Purchase APR: Interest on everyday spending.
• Cash Advance APR: Sky-high interest for withdrawing cash (avoid if possible!).
• Balance Transfer APR: Moving debt from one card to another, often with promo rates.

How Interest Is Calculated
Credit card companies use a daily formula to calculate interest. They break your APR into a daily rate and apply it to your average daily balance—not just what you owe at the end of the month. If you don't pay in full, you could owe more than you expect!

Avoiding Interest Charges
Good news—you can dodge interest with these simple strategies:

Minimizing Interest if You Can’t Pay in Full
Sometimes paying the full balance isn't an option. No worries! Try these:

• Pay more than the minimum: Every extra dollar reduces the interest you’ll owe.
• Tackle high-interest cards first: Focus on paying off cards with the highest APR to save more.
• Consider a balance transfer: Move debt to a 0% APR card to buy time while avoiding more interest.

Why It Matters
High balances and missed payments can hurt your credit score. Keeping your balances low and paying on time will not only save you from interest but improve your financial health. Discover the best credit cards for everyday use here. Stay on top of your credit card and avoid paying extra fees—you got this!

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