Reducing your credit card costs

7 tips to lower your credit card costs

1. Look for a low, fixed-rate card

Cards with a changing interest rateInterest rate A fee you pay to borrow money. Or, a fee you get to lend it. Often shown as an annual percentage rate, like 5%. Examples: If you get a loan, you pay interest. If you buy a GIC, the bank pays you interest. It uses your money until you need it back.+ read full definition can go u​p any time and charge you more interest. Look for a card with a low introductory rate that will last at least 6 months. If you have a high interest card, try to transfer your balance to a lower one.

2. Watch for penalties

Some cards charge high late fees if you miss a payment. Others might charge a penalty if you go over your limit. If you think you’ll ever be late with your payment, a card with lower penalties and a slightly higher interest rate may be a better deal.

3. Pay on time

Even if you have a card with a low interest rate, you may find the rate triples the first time you’re late with a payment. And if you only pay the minimum, it’s always good to pay on time. You’ll also protect your credit rating.

4. Ask for a lower rate

Ask your credit card company for a lower rate. If you’re a good customer, they may give you a break to keep your business.

5. Make sure you know what you’re getting

Always read the fine print. If you have a low introductory rate, make sure you know what happens when it ends. For example, what will the new rate be? Does anything else change when the interest rate changes?

6. Think twice about cards with annual fees

You might get a lower interest rate, but is it worth what you pay each year? If you’re going to pay your balance off in full each month, you may want to choose a different card.

7. Look for rewards that you can use

Some cards offer air miles, cash back or other rewards, but they may charge a higher interest rate. Choose these cards only if you know you’ll pay your balance off on time each month. And choose rewards that you’ll actually use.

Take action

Use this calculator to figure out how long it will take to pay off credit cards and other debtDebt Money that you have borrowed. You must repay the loan, with interest, by a set date.+ read full definition.

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