In recent years, the number of credit card users in India has increased rapidly. But with this increase in the number of card holders, the delinquency rate for these consumer credits is also on a rise. For instance, according to a report presented by the TransUnion CIBIL, delinquency for credit card payments has increased by 28 basis points from the previous year. This accounts for a 1.73% increase between 2018 and 2019.
To avoid such payment defaults and to ensure they repay their credit card dues on time, cardholders must look for different ways to reduce the burden of interest rate on their card. Such ways will not only ensure timely clearance of credit card debts but will also help cardholders improve their CIBIL score against their credit profile over time.
Methods Which Prove Effective In Lowering Interest Rates On Credit Cards:
- Clear Outstanding Credit Card Dues On Time
The golden rule for saving on credit card interest rate is by paying off the accrued credit card dues on time. Cardholders can avoid their credit card debts from piling up by clearing their entire outstanding amount by the due date. Doing so, they will be able to avoid the burden of interests and will also improve their history of repaying debts on time. Also, maintaining a fair track of repaying credit card dues on time will enhance its CIBIL score as well.
Additionally, cardholders should also utilise the grace period that is offered by credit card companies. It is a time period (usually 21 to 25 days), within which you can repay the credit card due without bearing any interest charge. One can use this period to their advantage and pay off their due comfortably without paying any additional funds as interest.
- Opt For Emi Payment Options
To ease the brunt of high-value purchases, individuals can convert them into affordable EMIs. Cardholders have the option to opt for either the Merchant EMI option or the EMI on Call option. In the case of the former, merchants offer cardholders the option to pay for a product in EMIs. While in the latter option, cardholders may avail an EMI option from the credit card issuer for high-value purchases. Nevertheless, both divide the repayment of the due amount over a longer span, lessening the interest burden significantly.
- Don’t Use Credit Cards For Foreign Currency Transactions
It is found that to use credit cards for foreign currency transactions is very expensive because it acquires conversion charges if used at any ATM and also some additional charges imposed.
- Select A Credit Card With Better Offers
Another way of saving on credit card interest rates is by applying for a credit card that extends better offers and charges an affordable rate of interest.
While applying for an online credit card, individuals should check the offers and benefits extended by the financial institution and then compare it with other popular credit cards in the market.
Selecting a credit card from a financial institution like Bajaj Finserv may come in handy for lowering credit card interests. They not only extend several offers and reward points to cardholders but also charge a reasonable rate of interest on outstanding dues.
Bajaj Finserv also brings pre-approved offers that make availing loans easy and time-saving. Such offers are available on several financial products, including personal loans, business loans and home loans. You can check your pre-approved offer by providing basic details like name and contact number.
Additionally, individuals can use their respective financial institution’s mobile app to check their offer and access essential details related to loan options and their payment.
For example, with the help of Bajaj Finserv App – Experia, individuals can easily keep track of loan repayments and check their customised pre-approved offers at any time and from anywhere.
The credit card app will help them keep a better track of their outstanding dues and will serve as a constant reminder of repaying the same urgently.
Similarly, they should refrain from using their credit card when travelling abroad to avoid the conversion fee and increasing their debt burden. Additionally, they should try not to add on to the burden of their existing debt by purchasing expensive things.
By following these ways, individuals would be able to reduce their credit card interest burden to a considerable extent. In turn, it will help them to plan and repay their credit card dues on time as well.