After making all of the bill payments in a month the last thing you want to do is make a credit card payment that eats up the rest of your money left over for that month. As you start to rack up your credit card balance, the larger the minimum payment will be, at which that will go little towards your principal balance and mostly to interest. If you are noticing that you are making a credit card payment each month, you may need to adjust your efforts to ensure that payment is greatly reduced.
Larger Payments are Needed
If you see your balance getting up there you will definitely notice the minimum payment start to rise, which could equal a car payment. By making this payment, unfortunately, will do little towards chipping away at the principal balance and will mostly go towards interest, so to really lower your minimum payment needed and really to reduce your credit card payment at all down the road is to make larger payments.
Take Advantage of a Balance Transfer
You can try calling the lender to negotiate the interest rates you have, which could be upwards of 16%, costing you plenty in interest payments. If that fails, then you should look to take advantage of a balance transfer offer either from one of your existing credit cards, or any of the many that you probably get in the mail on a daily basis. A promo rate for a balance transfer could be 0% interest for a year, which, depending on your balance, could be huge in paying down your card (or off). The only thing you may need to watch out for is a transaction fee of 3% which may be costly up front, but you will save on interest every month.
Stop Using the Card
You can curb spending all you want, but if you don’t stop using the card your balance will never go away. Of course, I’m talking about additional spending. If you use your card for all purchases and then pay off the balance each month you are in good shape, but if your card is for spending and those costs are rising, you can give yourself sort of a cash allowance, and use cash instead of credit. At least this way you can only spend what you have.
Improve Your Credit Score
When it comes down to getting the best interest rates on the market it really does mean your credit score should be at the top. This comes for a history of perfect payments, managing debt, and will rise over time, but it could take time, but will definitely be worth it in the long run. If you do not see any offers with reasonable interest rates, you may be overdue to work on your credit. Going forward, you can pull your credit for free once a year from any of the major credit bureaus, which is good idea to make sure you stay on top of accurate information being reported.