How to Keep Your Credit Card Free

Using a credit card can get expensive with fees and interest, but you can use a credit card for free if you handle it the right way. Follow these seven steps to keep your credit card free.

Choose a Credit Card With No Annual or Monthly Fees

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When your credit card has annual or monthly maintenance fees, you’ll end up paying for the credit card whether you use it or not. Some credit cards have annual fees that are waived when you make a certain dollar amount of charges within a year. If this minimum amount is outside your normal charging limits, you’ll have a hard time keeping your credit card free.

Make Sure Your Credit Card Has a Grace Period

Pay your balance within the grace period to avoid paying interest on your balance. The second most common credit card charge is the finance charge added each month when you carry a balance.

The grace period is the period of time you have to pay off your balance and avoid a finance charge. If your credit card doesn’t have a grace period, you’ll never be able to have a free credit card because you’ll incur interest charges beginning the day you make a charge.

Always Pay on Time

If you make a late credit card payment, you’ll have to pay a fee for being late. Paying on time means sending at least your minimum payment before the due date. But remember, if you want to keep your credit card free, you’ll send the full balance before the due date.

Don't Go Over Your Credit Limit

Your credit limit is the maximum amount you can charge without being charged a penalty. Some credit card issuers have eliminated over-the-limit fees which are charged when you exceed your credit limit.

If you’ve opted-out of over-the-limit fees any transaction that exceeds your credit limit will be denied. Don’t take a gamble though. Staying below your credit limit also ensures your balance is low enough that you can pay it in full.

Make Sure Your Checking Account Can Cover the Payment

If you write a check for your credit card payment and that check bounces, your credit card issuer will charge you a returned check fee. This fee is $35 to $39 for many credit cards.

Before you write a check for your credit card payment, confirm there will be enough money in your checking account to pay the check even after any pending transactions have gone through.

Avoid Cash Advances and Balance Transfers

Cash advances and balance transfers are transactions that incur fees automatically. When you make a cash advance or transfer a balance, you’ll automatically be charged a fee that’s typically a percentage of the transaction.

Rarely do credit card issuers waive these fees. Another reason to avoid cash advances is that they have no grace period – you’ll start accruing interest on the cash advance immediately.

Read Your Card Agreement to Learn All Your Fees

Credit cards can come with other fees, like a credit limit increase fee that’s charged when you request a credit limit increase. The best way to learn which fees your credit card charges is to read the credit card disclosure included with the credit card application or your credit card agreement.