In recent years, the Indian economy has seen a major shift towards the usage of credit cards. According to recent studies, approximately 41 million credit cards are operative in India, with 8.4 million cards being added every financial year.
Credit cards offer various benefits and features over hard cash or any other mode of plastic money, which makes it a choice amongst many for everyday expenses. Moreover, the ease to apply for a credit card and its borrower-friendly terms also makes it more profitable for applicants.
Credit cards also give borrowers more flexibility while selecting the terms, features, and rate of interest. A cardholder can even follow some tips to reduce the interest rate of their credit card and save a considerable amount of money on their expenses. Let’s take a look at how.
Tips to lower interest rate –
Apply with a higher credit score –
Your credit score is a 3-digit numerical representation of your financial history. Lenders look at your credit score to decide your creditworthiness. A higher score indicates you are financially responsible, meaning you have repaid your previous debts on time, haven’t defaulted on any payments, kept your credit utilization ratio within a recommended limit, etc.
Financial institutions are likely to offer you a lower rate of interest if you apply for a credit card with a good credit score. It represents that you have a higher chance of repaying the dues, making you a low-risk individual for the organization.
Check all the market options –
There are a host of financial institutions available in the Indian financial market that offers credit cards to eligible applicants. However, you should carefully scrutinize their terms and policies and more importantly the rate of interest offered before you zero-in on a particular credit card provider.
Reputed financial institutions often provide competitive interest rates to help their customers make the repayments in time and do not face financial difficulty while doing so. Companies like Bajaj Finserv offer an industry-best rate of interest, along with several add-on features and benefits with their Bajaj Finserv RBL Bank SuperCard.
SuperCard combines multiple features in one card. You can enjoy interest-free cash withdrawals from ATMs for up to 50 days, easy EMI conversation on expensive purchases, etc.
Bajaj Finserv also provides you pre-approved offers on credit cards, unsecured advances like personal loans, business loans, secured advances like home loans, and a range of other financial products. Such offers simplify the process of availing finance and help you save time. You can share your essential details on their website and check your pre-approved offer when you apply for a credit card.
Pay the outstanding amount in full –
Try to pay the complete outstanding amount in full within the given due date to reduce the payable interest. Any balance rolled over to the next month will incur interest on top of your present month’s expenses which is likely to increase the total amount significantly.
Utilize the grace period –
Try to pay the credit card dues within the pre-specified grace period. You can make the repayment within this interest-free period to save a significant amount of money. Go through the details of your credit card plans or check the card statement to know the grace period.
These tips are some of the staple methods if you want to know how to reduce the interest rates on your credit card. Following these will help you irrespective of the type of card you use.