If you are trying to pay off your credit card, my hat is off to you. You may find, however, that the balance never seems to go down. In fact, you may have even had it go up. How? With extra fees, changing interest rates, and changing due dates. These are some of the tactics that credit card companies are using these days. How do you get around them? Here are a few tips.
Valerie RumboughFirst of all, never get very close to your limit on a card. Sometimes the interest charges will push you over the limit, and then you are hit with an over-the-limit fee on top of the interest. In addition, when you are close to your limit, you may be adversely affecting your credit score.
Second, make sure you know exactly when your payment is due. Call the credit card company if you are not sure. Then, pay attention to your monthly statement and other notices for any date changes.
Third, be sure to pay on time, preferably a little early, each month. If possible, opt for online bill paying to be sure the company gets your payment on time.
In general, as you are paying off that card, try to also put away some extra cash into a savings account. Then, when you have an unexpected expense, you can use the cash instead of or in addition to the card, which will go a long way in reducing or eliminating your credit card balance.
Editor’s note: Rumbough, CPA, CFP, is vice president of finance with the Baptist Foundation of South Carolina. For more information, call (800) 723-7242.
In accordance with IRS Circular 230, this article is not to be considered a “covered opinion” or other written tax advice and should not be relied upon for IRS audit, tax dispute, or any other purposes.