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The average interest rate for U.S. credit card accounts assessed interest was 22.75% in November 2023, according to the Federal Reserve.
If you were to only make the minimum payment on a credit card with that interest rate and a $5,000 balance, it would take you more than 23 years to pay off your balance. And you would pay over $8,500 in interest on top of the original amount owed.
Fortunately, there are multiple ways to reduce the amount of interest you pay, such as using a credit card with a 0% intro APR offer. Let’s explore a few different strategies so you can learn how to avoid interest on your credit cards.
Key takeaways
- The easiest way to avoid interest on a credit card is to pay your bill in full every month.
- A slightly more advanced strategy to avoid credit card interest is to use a 0% intro APR credit card offer for purchases or balance transfers.
Why you should avoid credit card interest
High credit card interest rates could lead to overwhelming credit card debt.
Credit cards can be excellent tools for building your credit history, earning rewards, and managing your money. But when you use credit, you’re borrowing from a lender. And those lenders charge interest if you don’t completely pay off your balance before its due date.
If you compare credit cards, you’ll notice that many have high interest rates. These interest rates could quickly lead to debt, especially if you don’t completely understand how credit cards work.
For example, you may have heard that you can use a credit card to make purchases and then all you have to do is make a minimum payment each month so you don’t damage your credit score. While that’s technically true, it doesn’t account for the consequences of not paying off your balance.
Making a minimum payment leaves most of your balance intact, allowing interest to continue accruing. In many cases, credit card interest compounds on a daily basis, which means the amount of interest you owe grows every day.
After a while, you might find you actually owe more in interest than your originally borrowed amount. That’s why it’s important to completely avoid credit card interest if possible.
Ways to avoid credit card interest
Pay your bill in full each month
In general, you won’t be charged any credit card interest if you pay off your card’s balance every month. More specifically, paying off your card’s last statement balance before its due date is a sure way to avoid paying interest on purchases.
Here’s an example of how billing cycles and due dates work on most credit cards:
- You have 12 billing cycles per year, each lasting around 30 days. For example, you could have a billing cycle from January 1 to January 31.
- At the end of a billing cycle, you receive a statement with your balance, which is made up of purchases from the previous billing cycle and any unpaid previous balances. You also receive a due date for that balance, which is often around three weeks later. For a billing cycle that ends January 31, you might have a due date around February 21.
- As long as you pay your balance in full by the February 21 due date, you shouldn’t owe any interest on purchases from the January 1 to January 31 billing cycle.
Transfer balances to a card with a balance transfer offer
A balance transfer is when you transfer a balance from one credit card to another. The reason you might want to do this is because it could lower your overall interest rate and/or help you organize your debt in one place.
Some of the best balance transfer credit cards have 0% intro APR offers on balance transfers. That means a balance transferred to one of these cards could have zero interest charges during the offer period, which can last for 12 months or more.
That could give you at least 12 months to focus solely on paying off your balance without having to worry about interest. Here’s an example of how balance transfer credit cards could help you save money on interest.
| Standard credit card | Balance transfer credit card | |
| Balance | $5,000 | $5,150 (includes 3% balance transfer fee) |
| Interest rate | 18% | 0% for 12 months, then 18% |
| Minimum payment | $124.25 | $124.25 |
| Time to pay off balance | 273 months | 50 months |
| Total interest paid | $6,221.08 | $1,239.19 |
In this example, using a balance transfer card could save nearly $5,000 in interest. Note that if you pay more than the minimum payment in both scenarios, the time to pay off your balance and total interest paid will decrease.
Tip
Most 0% intro APR credit cards charge balance transfer fees if you want to transfer a balance from one card to another. These fees typically range from 3% to 5% of the transferred balance. For example, a 5% fee on a $1,000 balance transfer would be $50.Use 0% intro rate purchase offers
Some 0% intro APR offers are for purchases rather than balance transfers. This means you don’t have to pay interest on any purchase you make during the introductory APR period.
For example, if you have a 0% intro APR offer on purchases for 12 months, you don’t have to pay interest on purchases during that period. This type of offer could make sense if you know you have upcoming large purchases, such as paying for wedding expenses or buying furniture for a new home, and want a little breathing room to pay them off.
Keep in mind that you’re still responsible for paying off your credit balance even though you don’t have to pay interest for a while. We recommend having the balance completely paid off before the offer ends so you can avoid interest accruing on the remaining balance.
Deferred interest offers
Deferred interest offers aren’t the same as 0% intro APR offers. With a 0% intro APR offer, you don’t have to pay interest on purchases you make during the offer period.
With a deferred interest offer, you typically don’t have to pay interest on any purchases you make during the offer period as long as your balance is completely paid off before the period ends. If your balance isn’t paid off before the offer period ends, you might owe interest on any purchases you made during the offer period, often retroactive to the purchase date.
Be sure to read the fine print any time you put off interest to ensure you understand the terms.
0% intro APR cards we recommend
| Card | Intro APR offer(s) | Welcome offer | Annual fee |
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Wells Fargo Reflect® Card
4.9
|
0% intro APR for 21 months from account opening on qualifying balance transfers (then 17.74%, 24.24%, or 29.49% Variable) 0% intro APR for 21 months from account opening on purchases (then 17.74%, 24.24%, or 29.49% Variable) |
N/A | $0 |
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Chase Freedom Unlimited®
4.7
|
0% intro APR for 15 months on balance transfers (then 19.99% - 28.74% Variable)
0% intro APR for 15 months on purchases (then 19.99% - 28.74% Variable) |
Earn an extra 1.5% on everything you buy (on up to $20,000 spent in the first year) | $0 |
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Blue Cash Everyday® Card from American Express
4.9
|
0% intro APR for 15 months on balance transfers (then 18.74% - 29.74% (variable))
0% intro APR for 15 months on purchases (then 18.74% - 29.74% (variable)) |
Earn a $200 statement credit after spending $2,000 in purchases in the first 6 months | $0 (terms apply) |
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Bank of America® Unlimited Cash Rewards credit card
4.5
|
0% intro APR for 15 billing cycles for any balance transfers made in the first 60 days (then 18.74% - 28.74% Variable) 0% intro APR on purchases for 15 billing cycles (then 18.74% - 28.74% Variable) |
Earn a $200 online cash rewards bonus after you make at least $1,000 in purchases in the first 90 days of account opening | $0 |
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Citi Custom Cash® Card
4.7
|
0% intro APR for 15 months on balance transfers (then 18.74% - 28.74% (Variable)) 0% intro APR for 15 months on purchases (then 18.74% - 28.74% (Variable)) |
Earn $200 in cash back after you spend $1500 on purchases in the first 6 months of account opening. This bonus offer will be fulfilled as 20,000 ThankYou® points, which can be redeemed for $200 cash back | $0 |
Wells Fargo Reflect® Card
The Wells Fargo Reflect Card makes sense if you want to take advantage of some of the longest-available intro APR offers on balance transfers and purchases. However, this card doesn’t earn any rewards.
Learn more in our Wells Fargo Reflect review.
Chase Freedom Unlimited®
The Chase Freedom Unlimited has excellent intro APR offers on balance transfers and purchases. And you can earn 6.5% cash back on travel purchased through Chase Travel℠, 4.5% cash back on drugstore purchases and dining at restaurants, including takeout and eligible delivery service and 3% cash back on all other purchases (on up to $20,000 spent in the first year). After your first year or $20,000 spent, earn 5% cash back on travel purchased through Chase Travel℠, 3% cash back on drugstore purchases and dining at restaurants, including takeout and eligible delivery service and unlimited 1.5% cash back on all other purchases.
Learn more in our Chase Freedom Unlimited review.
Blue Cash Everyday® Card from American Express
The Amex Blue Cash Everyday Card has intro APR offers on balance transfers and purchases that provide above-average offer period lengths. With the Amex Blue Cash Everyday, you can earn 3% cash back at U.S. supermarkets, U.S. gas stations, and U.S. online retail purchases (up to $6,000 per year on purchases in each category, then 1%); and 1% cash back on other eligible purchases.
Learn more in our Amex Blue Cash Everyday review.
Bank of America® Unlimited Cash Rewards credit card
The Bank of America Unlimited Cash Rewards makes sense if you want intro APR offers on balance transfers and purchases, as well as the opportunity to earn unlimited 1.5% cash back on all purchases.
Learn more in our Bank of America Unlimited Cash Rewards review.
Citi Custom Cash® Card
With the Citi Custom Cash, you get two excellent intro APR offers and the opportunity to customize how you earn cashback rewards. You can earn 5% cash back in your top eligible spending category each billing cycle (up to the first $500 spent, then 1% cash back), plus unlimited 1% cash back on all other purchases; plus, as a special travel offer, earn an additional 4% cash back on hotels, car rentals, and attractions booked on Citi Travel℠ portal through 6/30/2026.
Learn more in our Citi Custom Cash review.
Ways to reduce credit card interest
Develop a debt repayment strategy
With a proven debt repayment strategy, you can chip away at your debt and reduce how much interest you owe over time until you don’t owe anything. It’s simple, but it takes a lot of determination and motivation.
Two popular debt repayment plans include:
- Debt avalanche: Pay off your debts starting with the highest interest rates first.
- Debt snowball: Pay off your debts from the smallest outstanding balance to the largest.
The debt avalanche method focuses on tackling the debt with the highest interest rates first, which can quickly reduce your overall interest owed. The idea behind this strategy is to tackle the most expensive debt first so you pay less in the long run.
The debt snowball method focuses on paying off your smallest debts first and working your way up to the largest debts. The idea behind this strategy is to feel satisfied as you pay off small debts, which will motivate you to continue budgeting and paying off your large debts as well.
Negotiate with your creditor
You might feel like the terms of a credit card agreement are beyond negotiation, but, surprisingly, they often aren’t. Many credit card companies and lenders are open to working with you to create a plan to repay your debt.
This could include a lump-sum debt settlement where you offer a one-time payment that’s less than what you actually owe. Or you might be offered some type of forbearance plan — where you might not have to pay interest or make minimum payments for a short amount of time — if you’re experiencing financial hardship and haven’t missed payments in the past.
Keep in mind that negotiations with a lender won’t always work, but it doesn’t hurt to try.
Apply for a debt consolidation loan
A debt consolidation loan might not seem logical at first since you’re essentially borrowing money to pay off borrowed money. But it could serve two important purposes:
- It could lower the overall amount of interest you owe.
- It could organize multiple debts in one place and make it easier for you to pay off your overall amount owed.
If you can use a debt consolidation loan with a 7.5% interest rate to pay off two credit cards with interest rates above 18%, that could be a huge win over time.
And if you’re finding it hard to focus on three or more different types of debt at the same time, a debt consolidation loan can bring all your debt to one simple location. That could cut out a lot of the mental gymnastics required to juggle multiple debts, each with its own interest rate and due date.
FAQ
How do I pay my credit card to avoid interest?
Pay your balance in full each month to avoid paying interest on your credit card purchases. In most cases, that means paying the total statement balance amount by its due date. If you do a cash advance, the interest can start accruing immediately, so you want to pay that off as soon as possible.
Do I pay interest if I pay the statement balance?
In general, paying your most recent statement balance by its due date is all you need to do to avoid paying interest. Your statement balance is the total amount of purchases made during the previous billing cycle, as well as any unpaid previous balances. This isn’t the same as a current balance, which is how much you currently owe based on all purchases, payments, and fees.
Do credit cards charge interest if you pay on time?
Most credit cards have a grace period that lasts between the end of a billing cycle and your payment due date. As long as you pay your balance in full by the due date, you shouldn’t have to worry about interest charges or late fees. Note that a credit card’s grace period typically doesn't apply to cash advances.
Bottom line
The two primary ways to avoid interest on your credit card are:
- Pay your balance in full each month.
- Use a credit card with a 0% introductory APR offer.
We always recommend paying your balance in full each month to avoid residual interest charges, but using a 0% intro APR card could also make sense if you understand how it works.
Check out our top recommendations for 0% intro APR credit cards.
Lucrative, Flat-Rate Cash Rewards
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Current Offer
$200 cash rewards bonus after spending $500 in purchases in the first 3 months
Annual Fee
$0
Rewards Rate
Earn unlimited 2% cash rewards on purchases