Interest can really wreak havoc on your financial position! It’s so easy to end up in constant debt because of interest applied by your financial institutions and other organizations. Fortunately for you, it’s fairly easy to avoid interest in most cases, as it essentially relies on your financial decisions and how quickly you make them. Avoid these mistakes, and avoid interest in some day-to-day scenarios.
1Not Paying Your Car Loan On Time
If you’ve acquired a car loan through a financial institution, there are bound to be fees for making late payments. In many cases, these fees are added to your remaining balance and make your monthly payments that much higher. The best way to steer clear of scenarios like this is to pay your car loan on time.
This bit of advice goes for any other loan you could have, including a mortgage. Institutions will always apply fees or charges to delinquent accounts. And you do not want to be in that position.
2Going Over The Limit On Your Credit Card
Having a credit card could be considered a liability to begin with if you’re unaware of how to properly manage it. It becomes even worse when you end up going over your limit. The fees that the financial institutions add on once you go over your limit are exorbitant and can really push you into debt. At all costs, sidestep those expenses if you want to remain debt-free.
3Not Having Automatic Deductions
You’re probably like many other people who would prefer to make monthly commitment payments on their own accord as opposed to having automatic deductions from their bank accounts. However, it makes more sense to make automatic deductions. This way, you’ll eliminate the possibility of incurring fees or charges from missed or late payments.
Automatic deductions ensure that your payments are taken from your account on a set date. Make sure that you have money in that account to cover the payments. As long as you do, you’re sure to get your payments made on time without late fees or added interest for delinquency.
4Using Credit Over Cash
With credit inevitably comes interest, unless you pay the total due on your account before the first due date. It doesn’t get any simpler than that! If there’s any small way that you can make a purchase or complete a transaction with cash, then, by all means, take that route as opposed to credit to avoid interest altogether.
5Having Debt And Slipping Into Bad Habits
As an added piece of advice, your intention should be to remain debt-free once you’ve gotten to that point. It will take some keen attention, but it’s undoubtedly attainable. These strategies will help keep you from incurring debt and additional interest.
Return all but a couple of your credit cards. Keeping some open and active will enable you to build a higher credit score for future loans, like a mortgage loan. Use your cards from time to time but have the cash available to pay off the total amount charged before the first payment is due. Settle any interest or debt you do incur at the soonest possible time. Build up your savings to handle emergency cash needs.
Adhering to these simple tips will make it easier to prevent debt and interest and maintain control of any debt you do incur. So there you have it – easy ways you can avoid interest being applied to your day-to-day expenditures. By using these tips, you’ll significantly lessen the chance of being exposed to the burdens brought about by debt.
Arlene Garretson is a proud resident of Daytona Beach, Florida, mother, and author. When she isn't writing about self-help, she enjoys hiking and photography: a great combination.
