Watch Related Videos
comments
Credit card payment increases can be a nightmare to most people. Most of us have a hard enough time with the debt we already hold, and having a payment increase will just make life harder. Here are a few tips you can incorporate to help ensure your card payments won’t increase.
Pay on Time. In fact, make your payment a few days before it’s due. Cutting the line closely when it comes to credit card payments is not a wise idea. A payment that posts just a few hours late can cause your interest rates to increase. These increases are generally not small either. In most cases the default interest rate on your card is the highest rate allowable by law, which in most cases is around 30%. This can double your interest, which will increase your payment amount substantially.
Avoid Taking Cash. Most credit cards will allow you to take cash from the available balance should you need it. In fact, most credit card companies make this easy for you to do, too easy. They turn around and charge you a much higher rate of interest on the cash advances. On top of the higher interest, you will end up paying it back over a longer period of time since your payments are applied to the lower rate balances first. The best way to avoid this headache and the increase in your payments is to just forget about the cash option on your card. Many times you can contact the card company and request that they block all pin or ATM transactions all together. This way temptation can’t get the best of you.
Pay All Your Cards. If you have three credit cards, and really enjoy the prestige or benefit associated with one of them, you need to make sure you pay on all three. If you run in to financial problems, transfer the balance from the cards you don’t care for to the card you do. Many people aren’t aware of the rules of Universal Default. Defaulting on one of your other cards can actually increase the rate on all your cards. Card companies reserve the right to check on your credit every so often. If they see that you are having a hard time with the other cards, they will consider you a greater risk, and can increase your interest using Universal Default. So even if you are only paying the minimum, continue to do so for all of your cards.
Pay More Than the Minimum. If you’ve always paid a good chunk of your credit card debt each month but then run in to financial woes and start making minimums, the card companies will start to get nervous. This shows them that you may not be able to make the payments, even the minimums. The best way to avoid your minimum monthly payments to increase is to send them more than they are asking for.
Don’t Over Extend Yourself. If you start applying for numerous credit cards, this can reflect poorly on your credit. To current creditors this can be seen as a red flag. It makes it look as though you are looking for more a way out of a bind. Of course, this can end up putting you in a tighter bind. Card companies will often increase your monthly payments or your interest rate if your credit score has dropped.
5 Tips To Avoid A Credit Card Payment Increase
|
Find the Best Credit Card
|
||||||||||||
