Want to Spend Less on Credit Card Interest in 2024? Do These 3 Things

Credit card companies don't allow consumers to carry a balance out of the goodness of their hearts. Rather, they allow consumers to make just their minimum monthly payments in exchange for collecting interest.

Over time, though, the interest you pay your credit card companies could amount to a lot of money. And the more you spend on interest, the less money you'll have at your disposal for paying bills and meeting your personal financial goals, whether it's saving for retirement or a house. If you're eager to spend less money on credit card interest in 2024, here are a few options to consider.

1. Pay off your debt sooner

The longer you carry a balance on a credit card, the more it's going to cost you in interest. So if you're able to cut back on spending for a period of time or take on a side hustle to drum up more cash, you might save yourself a world of money.

Let's say you owe $5,000 on your credit cards and you think you need another year to pay off that balance in full. If you're looking at a 24% interest rate, that has you spending $674 on interest all in. If you can cut your repayment window in half by slashing spending temporarily and/or working a second job, you'll reduce your interest costs to $356.

You can use this credit card interest calculator to see how much money on interest you can save by shortening your repayment window.

2. Do a balance transfer

A big reason you can end up spending a lot of money on credit card interest is that the rates many cards charge are quite high. The nice thing about a balance transfer is that you can often move your balances over to a single card with a 0% introductory rate. That gives you a break from racking up interest while you work to chip away at your balances.

Let's say you owe $5,000 at present but you move that sum over to a new card with 0% interest for 15 months. If you're able to pay about $333 a month on the card between reduced spending and working a side gig, you could have that $5,000 balance paid off by the time your introductory period comes to an end, thereby sparing yourself from earning further interest on that sum.

3. Consolidate into a personal loan

A personal loan won't give you a period of 0% interest. But what it will give you, generally speaking, is a lower interest rate on your debt than what your credit cards are charging you.

Let's say you owe $5,000 on credit cards and you're able to consolidate that into a fixed-rate personal loan at 9% interest. If you're able to pay that loan off in a year (say, by using the tactics mentioned above, like getting a side hustle), you'll reduce your interest costs to $247.

It's a shame to lose money on credit card interest, because the amount you spend in that regard could do a lot of good for you otherwise. So take these steps to save yourself money on credit card interest -- and enjoy the benefits of having more cash at your disposal.