How To Pay Off Credit Card Debt: Best Practices

Credit card debt can provide maximum financial benefit and can be a useful financial tool if you follow the best practices for paying that debt.

Obviously,  the first best practice to get out of credit card debt is to pay the balance of every card in full every month on or before the payment due date. When you can’t do that, follow the most feasible best practices for you to keep current on your credit card payments.

Always pay at least the minimum on every credit card. Having even one late payment can drop your credit score several points. Paying the minimum on every card each month ensures that no negative items are reported to your credit. You want to strive for positive credit reporting.

Most credit cards have a grace period before they start charging interest, provided you pay the last statement balance in full by the due date. With credit card interest rates so high, taking advantage of the grace period to avoid interest charges is the best practice for paying credit card debt. Make it a personal goal to pay the last statement balance on any card before it initiates interest charges.

Another tip on how to pay off credit card debt, pay more on higher interest rate credit cards. Interest rates on credit cards can be very high. A high rate combined with a high balance can add up to more money than the actual amount of purchases you make with the card. A card with an annual rate of 24% adds nearly two percent each month to your balance even if you don’t make any credit purchases.

However, the exception is that if you can pay the full balance on a credit card, or the amount to prevent you from having to pay interest, pay that first instead. No minimum payment and no interest will save you more money than paying down higher interest rate cards.

Making at least the minimum payment on time every month and keeping interest charges under control ensures that your credit cards are nothing but a useful financial tool for you, making it easier to get out of credit card debt.

If you are wondering how to pay off credit card debt and need help, contact Key Credit Repair for your Free Credit Repair Consultation.