Credit cards have become an increasingly popular way to pay for purchases and make payments on bills. Paper money is becoming a rare commodity in today's society. However, credit cards can cause a slew of problems if not used with care. Credit card companies offer two payment options when you receive your bill. The first is to pay the balance off entirely with a check or another credit card; and the second is to pay the minimum balance due, which is a partial payment of what you owe and interest.
Step 1
Pay at least $10 extra per month in addition to the minimum balance due. This will not only help you pay off your credit card debt sooner, but it will actually lower the amount of accumulated interest for the year.
Step 2
Switch to a credit card with lower interest rates. There are some companies that offer a 0 percent APR on balance transfers from your current card to your new one, drastically cutting down your payments. Consolidating all your cards onto one will help you reduce and pay off your debt plus interest sooner.
Step 3
Hire a debt consolidation company to help you with your interest rates. These companies can actually get you a lower monthly payment, reducing interest rates.
Step 4
Pay your credit card bills on time each month. Late payments will only add extra interest and late fees to your account balance and have negative impact on your credit rating as well.
Step 5
Pay your full balance when possible. If your bill reflects a balance that you can easily pay off with one payment, then do so. This will keep your interest from getting out of hand. The longer you carry a balance and the less you pay, the more interest you will accumulate for the year.
Tips and Warnings
- Before applying for a credit card, ask the company for a lower interest rate. Haggling over APR percentages is one way that professional investors get the lower rates.
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