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Struggling with high credit card bills every month? You’re not alone. Many urban Indians find it challenging to keep their monthly credit card charges under control. But with some smart strategies, you can significantly reduce these fees and interest costs. In this blog, we’ll share 7 proven tips to help you minimise your credit card monthly charges. You’ll also learn how to manage your credit card payments more effectively for long-term financial well-being.
Understand Your Credit Card Monthly Fees
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Annual fees: Some credit cards charge an annual fee, typically ranging from ₹500 to ₹5000 or more. Check if your card has this fee and consider switching to a no-annual-fee option.
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Late payment fees: If you miss your payment due date, you’ll incur late fees of up to ₹500-1200 per instance, adding to your credit card monthly charges.
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Over-limit fees: Exceeding your credit limit can attract over-limit fees of around ₹500-1000, further inflating your monthly bill.
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Cash advance fees: Withdrawing cash using your credit card usually involves a cash advance fee of 2.5-3.5% of the amount, plus high interest charges.
Sidestep Interest with Timely Payments
Paying your credit card bill in full by the due date is the easiest way to avoid monthly interest charges. Unlike with other loans like personal loan EMIs, credit card interest is charged on your unpaid balance daily. Even if you can’t clear the full amount, pay more than the minimum due to minimise interest costs.
Here’s an example of how much you could save:
|
Payment Scenario |
Outstanding Balance |
Interest Rate |
Interest Charges |
|---|---|---|---|
|
Minimum payment |
₹50,000 |
40% per annum |
₹1667 per month |
|
Full payment |
₹50,000 |
40% per annum |
₹0 |
As the table shows, making just the minimum payment attracts substantial monthly interest, inflating your credit card monthly charges.
Choose the Right Credit Card
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Look for cards with low or no annual fees, especially if you’re new to credit.
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If you carry a balance often, opt for a low-interest credit card to minimise monthly charges.
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Compare reward points, cashback offers, and other perks to get the most value from your spends.
Airtel Finance offers an excellent credit card with attractive benefits for your lifestyle needs. Check your credit score for free and apply on the Airtel Thanks app.
Lower Your Credit Utilization
Your credit utilisation ratio is the percentage of your available credit limit that you use at any given time. Aim to keep this ratio below 30% to avoid high-interest charges. For instance, if your card limit is ₹1 lakh, try to restrict your outstanding balance to ₹30,000 or less.
|
Credit Limit |
30% Utilisation |
50% Utilisation |
80% Utilisation |
|---|---|---|---|
| ₹1,00,000 | ₹30,000 | ₹50,000 | ₹80,000 |
| ₹2,00,000 | ₹60,000 | ₹1,00,000 | ₹1,60,000 |
| ₹3,00,000 | ₹90,000 | ₹1,50,000 | ₹2,40,000 |
Set Up Autopay for Timely Payments
Enroll for the autopay facility on your credit card to automate payments and avoid late fees. You can set it up to pay either the full balance, a fixed amount, or the minimum due on the billing date. But remember, autopay is not a substitute for tracking your spends. Keep tabs on your card usage to stay within your repayment capacity.
Convert Large Spends to EMIs
For big-ticket purchases, check if your card offers a no-cost EMI facility. This allows you to pay for your purchases over several months without additional interest. But note that the original transaction amount will still be blocked from your credit limit until the EMIs are cleared.
Here’s how a no-cost EMI can ease your monthly charges:
|
Purchase Amount |
No-Cost EMI Tenure |
Monthly EMI |
|---|---|---|
| ₹30,000 |
3 months |
₹10,000 per month |
| ₹60,000 |
6 months |
₹10,000 per month |
| ₹90,000 |
9 months |
₹10,000 per month |
Cut Out Unnecessary Card Fees
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Opt out of add-on features like balance shield insurance that inflate your credit card monthly fees.
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Avoid using your credit card at ATMs to keep cash advance fees and interest at bay.
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Stick to your card’s spending limit to prevent over-limit charges from ballooning your bill.
Conclusion
Managing your credit card prudently is key to minimising monthly charges and using this financial tool to your advantage. By improving your credit utilisation, choosing a suitable card, automating payments, and converting spends to EMIs, you can keep your credit card monthly charges under control. Additionally, tracking your credit score regularly will help you make timely payments and maintain a healthy credit profile for all your future financial needs. Apply on the Airtel Thanks app for your Airtel Finance credit card.
FAQs:
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How do I get rid of monthly fees on my credit card?
Contact your card issuer to check if you can get your annual or monthly maintenance fees reversed or reduced based on your payment history and relationship. -
How do I avoid monthly credit card fees?
Choose a credit card with no annual or monthly fees. Pay your full balance on time every month to avoid late payment and interest charges. -
How do I stop a monthly charge on my credit card?
To stop an unwanted subscription or recurring payment on your credit card, contact the merchant directly to cancel. If needed, ask your card issuer to block that charge. -
How do I lower my monthly credit card payments?
Make more than the minimum payment due to reduce your overall interest outflow. Set a budget to control your credit card spends and keep your monthly charges affordable.
