3 Principles of Paying Credit Card Bills

Paying credit card bills is not a complicated task. Despite the fact there are a number of resources making this process simple and efficient today, there are far too many Americans who allow themselves to get into debt problems strictly owing to credit cards. The average credit card debt for American adults is over $4,000, and every day bad borrowers enter credit repair and consolidation programs. Stopping the problem before it happens is a much better way to avoid financial stress and keep your credit score high. Follow the three simple rules to making payments, and you will never have to worry about high balances.

#1 Make Monthly Payments

The first and most important thing for any person who has a credit card to do is make simple monthly payments. Even if you pay no other sum each month, the credit card company will send you a bill for a monthly payment based on your balance. This payment is typically low, such as 1% of the total balance you have on your card. This payment is not optional, and it is the only way to assure your credit card stays in good standing. Missing even one monthly payment will knock your credit and send your bill to collections. Missing multiple monthly payments may result in the closing of your credit card.

#2 Pay Balances

Interest rates on credit cards compound, and they typically compound monthly. This means the cost to use the card rises sharply if you allow a balance to continue month after month. Pay down the balance on the card before the new billing cycle begins. There are times when this will not be possible, but you should be aware of your spending habits. If you are unable to pay down the card and are carrying a balance higher than 10%, then remove the card from your wallet and use it for emergencies only until the balance is paid down.

#3 Review Statements

Credit card companies make mistakes. After all, a credit card is actually just a sequence of numbers stored in a magnetic strip in a piece of plastic. If these numbers are read wrong, you could be incorrectly charged. The same is true if a restaurant, shop or bar simply adds a digit to your charge unexpectedly. At times, identity theft may even be the cause of an incorrect charge on your statement. In any of these cases, you will be held liable for the payment if you do not file a complaint and prove the charge is wrong. You will need to do this within 30 days or the credit card company will not respond to your request. Each month, when you receive your statement, compare it to your receipts and immediately question any incorrect charges.

Improve Your Credit Score - Free Consultation