Time To Pay Your Bill! |
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So, you've had your credit card for a while. You've used it,
possibly even too much. Now it is time to start paying it off.
Unfortunately, the joy you probably experienced while you were
charging up a storm is about to turn into dread. Paying off a
credit card is a whole lot harder than charging one. There are
some options that you have, as well as some tips to make the
whole ugly process go a little smoother.
How To Pay Off A Balance
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Of the people who carry a credit card, about one-third of them
do not pay off their balance each month. If you're one of these
people, you may have noticed that even though you pay the
minimum payment due each month, the balance either never changes
or even continues to grow.
Just why does this happen, you may ask? Well, let me let you in
on a little secret the credit card companies hope it will take
you a long time to figure out. The amount of your minimum
payment is usually equal to the interest only that is due on
your balance. It may even be less. So, even if you're paying
your minimum amount on time each month, none of that payment is
actually going to the principal. At this rate, you'll never pay
off your card. So, let's go over a couple of tips that may help
you put a dent in your balance. |
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First, quit using your card. If you need to make some changes in
your lifestyle, then do it. Unless it is truly an emergency,
don't use your card for anything. Charges will only keep the
vicious cycle going.
Pay more than the minimum payment due. For reasons stated above,
this is critical to eliminating credit card debt. If you can,
transfer your card to a card that has a lower interest rate.
These applications come in the mail all the time. Just remember,
this new card isn't for charging. It's to be used as a tool to
pay the balance off.
Payment Agreements
When you apply for any credit, there are several different
payment agreements that you can opt for. The first is the
revolving agreement. This basically means that you can either
pay off the card each month or make only partial payments. If
the balance is not paid off though, you will be charged an
interest rate on the balance. This is the most popular form of
payment agreements.
The second kind is the charge agreement. This is set up so that
you are required to pay off the balance in full each month and
the third agreement is the installment agreement. This allows
you to pay a fixed amount of the balance each month until the
balance is paid in full.
Choose a payment option that will work best for you and proceed
wisely. Nothing ruins your credit score like a bunch of late
payments!
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