How to Not Pay Interest on your Credit Card?

Are you someone who carries a balance on their credit card and pay interest every month?

Here’s an idea: Stop making the banks easy money. There are a couple of ways you can actually reduce or pause the interest paid every month without affecting your credit score.

Here’s what you can do:

Step 1: Open a new credit card and do a balance transfer.

Step 2: Call your bank and negotiate a better interest rate.

Step 3: Call your bank and ask for an interest free promotion before you make a big purchase.

Step 4: Look for an existing credit card that may have a balance transfer promotion.

Step 1: Open a new credit card and do a balance transfer. 

You want to make sure the new account you open has a 12-month, 18-month or 21-month interest free balance transfer offer. If you are in Australia, you might see some crazy 36- and 48-month promos as well.

You will also want to sit down and make a simple calculation. I do plan to one day incorporate the calculators to this website so you can easily see what the best method for you will be, but just use ChatGPT.

For example, if you have 10,000 in debt with Chase in credit card X, you may want to open up another chase card, Y that that has an introductory promo for 12-month 0% interest at a 3% balance transfer fee. This way you’re simply moving the 10,000 from X to Y. You will be hit with a $300 balance transfer fee for doing this.

Here is an example calculation of how much you could be saving if you did do a balance transfer for a $10,000 balance.

Please beware that opening a new card means your credit score will take a short-term small hit. This will bounce back up if you keep making your payments.

Step 2: Call your bank and negotiate a better interest rate.

This is an easy step that not many actually follow. Just pick up the phone and call your bank. If you get an agent who’s not helping you much, then just try again later. You will eventually get to someone who will help you. Although my assumption is you will not be spending too much time on the phone. Just remember, you are making the bank money either way. They will agree to a rate review.

Step 3: Call your bank and ask for an interest free promotion before you make a big purchase.

This is another fairly simple method to save big. When you know you have a big bill or if you are about to make a big purchase on something, just call your bank and ask them if you have any 0% interest promotion. You typically get one every year. As long as you keep making payments without missing, in their eyes you are a reliable customer who’s making them rich. If they tell you that you do have a promo, then once that’s active you can go and make your purchase.

Typically Discover has 12 month interest free and Bank of America seems to have a weird interest free for 9 month promo. Barclays shows a 10 month promo right now for me.

Step 4: Look for an existing credit card that may have a balance transfer promotion.

This is the best out of all the options. Look into your existing cards promo tabs to see if you qualify for an interest free balance transfer promo. If you don’t call the bank and check if you have any. Unfortunately, balance transfers have to be to another card and cannot be to the same card.

If you do, then activate it and put your details. Once approved, which should take about 1-2 weeks, then you can stop paying interest and start making the minimum payments for a set amount of time.

You can also keep rinsing and repeating this, but please make sure you are making smart choices. This isn’t the best investment practice one would say, but the future value/present value of money might say otherwise. A dollar today is better than a dollar tomorrow. Use debt to your advantage.

Disclaimer: Note that none of this is financial advice. Everything is simply an opinion. You are advised to consult a licensed financial adviser before making any financial decisions.