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Paying Off Your Credit Cards: 6 Tips to Stick With a Plan
It’s the end of the month, and you know what that means. Any day now, your postman is going to show up at your doorstep with the dreaded credit card bill.
If paying off your credit cards seems like an insurmountable task, you’re not alone.
A recent report from financial research firm Javelin Strategy & Research found that many Americans are having a more difficult time paying off credit cards. And who can blame them, with the economic downturn, mortgage crisis, and high food and fuel costs? Here are a few results of the study:
• 28% say paying off their credit card balance has become more difficult
• 45% say their ability to contribute to savings has decreased
Paying off Credit Cards
Especially in difficult economic times like these, it’s crucial to develop a plan to pay off credit cards. On the surface, creating a plan seems perfectly simple: charge less and pay down more. But anyone who’s ever been in debt—or anyone who’s managed their own finances for that matter—knows that sticking to the plan isn’t that easy.
Here are 6 valuable tips to help you develop a plan that you can stick with:
1. Create an online account with your credit card company to pay your bill each month. You’ll save on postage, you’ll gain more control over your account and you won’t have to worry about late payments.
2. Utilize the resources that your credit card company makes available. Set email alerts to notify you when payments are due. Many credit card companies offer this service, which will protect you from late fees and accumulating interest payments. Also take advantage of literary resources, online payment calculators and free same-payment by phone or online.
3. Look for credit cards that offer incentives. Some credit card companies offer cash rewards if you make your payments on time.
4. Pay off the credit card with the highest interest rate first. If you have outstanding balances on multiple credit cards, make the minimum payment on all, but pay as much as possible on the card with the highest interest rate and move on from there.
5. Take advantage of special offers. Look for low or 0% APR offers on balance transfers and purchases. But pay off your debt before the introductory offer ends.
6. Don’t forget the importance of monitoring your credit report and improving your credit score. The higher your credit score is, the lower your interest rates will be.
