Credit Card Payments

Credit cards are not always the best thing to have when you are struggling with your monthly expenses and often we find they are a crutch to use in everyday life. We feel the need for a cushion just in case we don’t have the money at our disposal. What most should realize is that there are good and bad things about credit cards. It really depends on how you use them and the credit card payments you make. Below you will find information on credit card payments and how you should use the card to keep yourself looking favourable on the credit history side of things.

First you always have a minimum payment with credit cards that you must make each month as long as there is a balance on the card. This means that depending on the actual balance plus interest you have anywhere from a couple of pounds to several pounds that you will need to make in the month. The minimum balance usually only covers the interest you have earned on this balance. This means that when making credit card payments you are never actually paying the card down. While the balance may not move down as long as you don’t use the card it will not increase. You are in effect caught in a limbo situation. This is not the best place to be with a credit card. When you make credit card payments you want to really decrease the balance. To do this you have to make the payments more than the actual minimum payment.

There are a few ways of looking at credit card payments once you stop the cycle of just paying the minimum balance. First you can pay a set amount every month. This amount should be what you can afford, without actually having to use the credit card. For instance say your minimum payment is ₤25, the interest that you have been charged for the month is just two pounds less. If you take what the minimum payment is and triple it then you are actually going to make a difference. Not only have you paid the interest the credit card has earned, but you have also paid the next months interest the credit card will earn and paid a little off the actual balance. This may seem like a round about way of thinking about your credit card payments, but when you have a budget to stick to it is the best plan.

If you have a little more room with your credit card then you can go with a different payment method. Let’s look at this example: you have a balance of ₤250, and you have the entire amount in your bank account without having to use the credit card in the next month for groceries or other items that you need. In this example you should pay off the entire balance as the credit card payments. This makes it easier because you will not earn interest on the card making the payments more than they had to be.

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