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How to avoid credit card interest by paying the full balance

Eliminate interest by sticking to a simple payment plan.

Almost all credit cards feature up to a certain number of interest-free days when you pay your closing balance in full by the statement due date. This gives you a way to avoid paying interest on new purchases while still enjoying the convenience and rewards of a credit card. Read this guide to find out how this feature works and other factors to consider when you want to avoid interest charges.

Why should I pay my balance in full each month?

Credit cards are designed to work as a short-term cash flow solution. You can avoid paying anything extra — other than the product’s annual fee, if it has one — when you pay the full balance by the due date and only use your credit card to make purchases.

This interest-free period of time is called your “grace period.” Up to 21 days is the most typical interest-free period for credit cards, although some may offer a longer or shorter interest-free period.

How much will I have to pay each month?

To avoid interest, pay your listed credit card closing balance, also known as a statement balance, which will vary based on how many purchases you’ve made on the card during the statement cycle.

You could also make a minimum payment. The minimum payment is what you must pay back each month and usually ranges from 2-3% of the total account balance. If you don’t pay this amount, your credit card provider may charge a late payment fee. But if you only pay the minimum amount, you’ll be charged interest on the balance of your account.

For example, if you spent $2,000 on a new credit card with a minimum payment of 3%. The minimum you would have to pay off your statement would be $60. If you wanted to avoid interest charges, you would have to pay the full statement balance of $2,000 off the account by the due date on the statement.

It is recommended you pay as much of your outstanding balance as you can each month, even if you can’t manage the full statement balance. It can take years to clear your balance by only paying the minimum amount and in some cases, you may never be able to pay off your card. If you need more help, use this calculator to plan out your repayment plan.

Tips for paying your credit card balance in full

  • Set up an autopay. This allows you to pay the minimum amount due, a partial amount or the statement balance every month. To set up this payment option, you can log in to your card account online and configure your autopay preferences. You can also call your card issuer directly to set up autopay.
  • Change your statement date. You can make your billing date line up with when you’re paid. For example, if you’re paid monthly on the first of the month, you could request to have your statement due date fall then or a week later so you will have funds ready to pay it off. You can change your statement issue date and minimum repayment due date by calling your financial institution.
  • Set calendar reminders. Set up reminders using your phone or computer so you never miss a payment due date.
  • Create a budget. You can create a budget to find out where you can cut back on expenses in order to pay your card balance in full each month. A budget lets you see how much you have coming in and how much is going out, as well as where it all goes.
  • Use a savings account. Open a savings account just for the money you plan to use on credit card repayments. A savings account will cost you nothing and you can get rewarded with bonus interest when you make regular deposits.

Compare 0% intro balance transfer and purchase APR cards

Name Product Filter values Rewards Purchase APR Annual fee
Blue Cash Everyday® Card from American Express
3% at US supermarkets on up to $6,000 per year (then 1%), 2% at US gas stations and select US department stores and 1% on other purchases (redeem as statement credit)
0% intro for the first 15 months (then 13.99% to 23.99% variable)
$0
Earn a $200 statement credit after spending $2,000 in the first 6 months. This is a higher-than-average welcome offer for a card with no annual fee. Terms apply, see rates & fees
Blue Cash Preferred® Card from American Express
6% on select US streaming services, 3% on transit and US gas stations, 6% at US supermarkets on up to $6,000 annually, then 1% after that and on other purchases (redeem as statement credit)
0% intro for the first 12 months (then 13.99% to 23.99% variable)
$0 intro annual fee for the first year ($95 thereafter)
Earn a $300 statement credit after you spend $3,000 in purchases on your new card within the first 6 months. Having 6 months to earn a welcome offer is a rare benefit as most cards give you only 3. Terms apply, see rates & fees
Citi Simplicity® Card
N/A
0% intro for the first 12 months (then 14.74% to 24.74% variable)
$0
With an intro APR of 21 months, this card has one of the longest balance transfer offers on the market. Plus, no late fees and no annual fee.
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Bottom line

Stick to the golden rule of paying your statement balance in full to keep credit card interest out of sight, out of mind.

If you have credit card debt you’re struggling to pay down, a balance transfer can also save you money on interest repayments. Compare balance transfer credit cards to find a product that’s right for you.

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