Save Money by Paying off a Credit Card

Posted by Peter Brady on Tue 29th August 2006 at 07:00 AM, Filed in

The simple mantra is pay your credit card balance off each month!

It’s important to keep fixed in your mind that a credit card should be used as a tool that can assist with cashflow, budgeting and protects your position on important purchases. Being shrewd with your card and being a “rate tart” in common parlance can save you serious money.

For instance, you can defer payment on goods and services for up to 59 days, without paying a penny in interest. However, you must pay off your entire balance at the end of each and every month. If you fall behind, you will start racking up compound interest at a rate of knots.

Forgetting to pay even the odd month can add up because many cards charge interest from the original transaction dates until your balance plus interest has been cleared. The other thing to consider is that if you were to pay the minimum repayment on say a £2000 balance could mean that the debt wouldn’t be repaid for 40 years with a total repayment cost of treble the original sum. Shoving the debt problem under the carpet is a recipe for disaster, confront it and pay as much or ideally all of your balance each month is just plain clever.

This entry has been viewed 924 times.

READER COMMENTS:

No comments yet.