It’s always important to listen to expert advice on how to pay off a credit card. Doing it the right way goes beyond paying a minimum monthly payment.
There are several items on the statement that are important to know and manage. The reason? To prevent credit card debt from completely stifling your finances.
The objective is to use credit cards as an ally in our daily life and not to be slaves of the debt that day by day is generated and that in spite of the payments seems not to diminish.
Undoubtedly, how to pay a credit card is key to control our economy. The goal is to pay off credit cards as quickly as possible and generate less interest.
Many people have considerably high credit card debt and make certain payments each month. However, they notice that their debt is not decreasing.
This is probably because they are paying the interest on the card and not the debt. It is these cases that end up bleeding little by little the economy of each one of us.
For this reason, it is essential to know some concepts related to their use. It is essential to know and handle terms such as commissions, late fees, payment dates and cut-off dates, among others.
One of the aspects that usually generates confusion among customers are payment dates and cut-off dates.
In this regard, it is important to note that the payment date is the limit that the bank gives the customer to pay, at least, the minimum amount of the debt.
On the other hand, the cut-off date is the day on which the bank issuing the card marks the end of a period of purchases made by the customer.
At the same time, a new period begins at that moment. From the cut-off date the bank grants the customer a number of days, usually 20 calendar days, to pay the acquired debt or at least part of it.
Late fees are the interest or charges that the bank adds to the amount owed as a consequence of the delay or non-payment of the established minimum.
Hence the importance of paying the acquired debts on time. Undoubtedly, this is one of the key aspects in the crossroads that often arises on how to pay a credit card.
Commissions are a certain amount of money that the bank charges its customers for different concepts, such as: ATM withdrawals, rewards programs, among others.
The interest rate is the percentage that the bank charges the customer for financing the debt and for lending money to make purchases through the card.
When people pay the debt in full before the payment date, they avoid paying interest to the issuing bank. This, in fact, is the correct way to use the credit card.
The minimum payment is, as its name suggests, the minimum amount that the customer must pay to the card issuing bank for the money borrowed.
Failure to do so will result in the card’s credit not being maintained and will even generate a negative credit history that will be taken to larger institutions. As a result, it is possible that no other bank will agree to grant you credit cards, loans or other loans.
As explained above, paying off the debt in full before the cut-off date is the most advisable way to use credit cards.
Therefore, it is recommended to acquire affordable debt. By paying the debt in full, interest and other late fees will be avoided and the available credit will be fully available and complete for use.
One of the ways to effectively pay off a credit card is through balance transfer.
This strategy consists of moving the debt on one of the credit cards to another credit card that charges less interest. This measure achieves two objectives: it saves finance charges and at the same time the person will have more money available to pay the principal of the debt.
It is important to remember that not all banks have this figure of balance transfer active.
For this reason, the best thing to do is to go to the bank and get information about it. This aspect is key to determine how to pay off a credit card in an effective and timely manner, as well as to discover the different options that exist in this regard.
Undoubtedly, paying the debt in full is one of the most recommended actions. However, in case you cannot make this payment, another of the most recommended options is to pay more than the minimum of the debt.
The main reason for this is because if only the minimum balance is paid, in reality, the only thing that will be cancelled will be the interest and therefore the debt will not decrease.
Paying as much as possible each month is one of the best strategies to apply in case full payment of the debt is not possible. Once again, it is important to remember the importance of making an effort to pay more than the minimum on each payment date.
It is also advisable to read your credit card statements thoroughly.
In this way, not only will you be able to determine aspects such as interest, total debt, minimum payments and cut-off and payment dates. You will also be able to see if there are any purchases that the card owner does not recognize.
Another option is to pay the minimum or more of the credit card and as soon as you have more money available to complete the remaining debt.
In these cases it is advisable not to make additional purchases until the previous debt is paid in full, especially if it is considerably high. It is a matter of looking for strategies that facilitate the complete payment of the debt and thus avoid interest the following month.
One of the most effective ways to maintain a stable economy is to avoid having too many credit cards. The more credit cards, the greater the out-of-control spending and at the end of each month the debt will become more difficult to pay off.
Not to mention that the interest will eat away at your ability to pay and your available credit line.
This is a recommendation that many people take for granted. However, it is an important aspect that each of us should remember on a daily basis.
Avoid buying things that are not necessities or other goods whose price will be impossible to pay at the end of the month are aspects that should definitely be taken into account. We must be aware of our limitations to avoid future headaches.
On some occasions issuing banks launch “interest-free months” promotions. It is advisable to pay special attention to them and not spend disproportionately for such promotion.
It has been proven that customers tend to increase their debts considerably during these promotional periods.
When using a credit card, we are getting into debt. That is why it is so elementary to have a clear balance of our finances and avoid reaching extreme points in which the income is insufficient to face the debts in general.
The most important thing is to organize expenses by priorities and to keep a strict control over them.
Undoubtedly, this is one of the most basic but at the same time most important recommendations. Paying debts in a timely and punctual manner is one of the most effective strategies to control our finances. As always, the goal is to keep debt at bay.
Sometimes a person does not have the full payment amount at the time of the deadline.
In these cases it is advisable to pay as much as you can and as soon as you have the money available to pay off the remaining debt. Even if the next payment date has not yet arrived.
This is another of the most recommended strategies to effectively deal with the question of how to pay off a credit card without dying in the attempt.
For the credit card to become our ally and not our enemy, it is essential to know how it works and use it in a measured and responsible way.
To do so, it is necessary to know and handle all the terms and concepts that define it.
In addition, it is also important to seek information from the issuing bank in case of any doubt regarding the payments and options offered by the card.
In addition, controlling expenses, using the card with moderation and not getting into debt more than the income are some of the basic recommendations to use cards and loans effectively.