One of the easiest ways to damage a credit score is by paying a monthly credit card payment late. Further, one of the easiest ways to reach a point where debt becomes crippling is to use credit cards irresponsibly.
Having balances with high rates of interest and then just paying off the minimum each month is NOT where you should be.
It is SO easy to pay with a credit card. But, card balances can creep up. Minimum payments may look manageable within the monthly budget but that can change in the blink of an eye.
Top Reasons to Make Credit Card Payments on Time
There are several reasons why you need to make your payments on or right before their due date. You can end up in a lot of financial trouble unless you stay focused.
Use your phone calendar and send reminders to yourself with the dates your cards are due.
What happens if you are maxed on on credit cards and something like this happens:
- you lose your job
- your landlord makes you move out
- a family member falls ill
- worse, a family member dies
These are serious situations and they do happen. Emergencies and accidents can happen at any time. How could you get by for a few months if your credit cards are already at their limit?
Not only would there be less income for those months (or worse, none) but your monthly bills won’t change.
Pay off your credit cards. Always try to pay the full amount owing every single month. The rate of interest charged on these balances is far higher than even the worst personal loans.
So, paying off credit cards by the due date certainly makes sense. Credit cards used sensibly are very convenient, used irresponsibly they are a recipe for disaster.
Often there will be a charge for a late payment; this is wasted money and should be completely unnecessary. That late payment fee could have been added to your payment! Which you HAVE to make anyway!
If you have had to make late payment fees in the past, then in future try to do these 3 things and pay your entire bill down sooner.
Make the minimum payment.
Also, pay off any interest charged.
Extra money? How much was that last late payment fee? This month, pay the equivalent amount.
A credit score is determined by the way an individual uses their credit cards. Pay on time? Credit score goes up.
Late payment? Even if you are only late by 1 day? Credit score goes down.
ALWAYS PAY THE MINIMUM PAYMENT PLUS ANY INTEREST CHARGED
In the past credit card companies offered credit cards and four figure credit limit immediately and regular increases of the credit limit after that.
It is common to have several cards and a line of credit that can be used. And a lot of people get into personal hardship because of spending too much.
If you feel your are overburdened now with debt, consider consolidating. And STOP using your credit cards. Period.
A consolidation loan (even if you have a bad credit score) will always be much cheaper than paying the high interest the credit card company is charging.
Want to learn more about Debt Reduction? Check out the link.
