Credit cards, when used properly, can be a powerful financial tool. They allow someone to buy online, which is usually where the good deals are found. And with a few weeks often between the time of purchase and when the payment is due, credit cards are can effectively be an interest free loan.
There’s just one problem. If you don’t pay the thing off each month, you’ll get hit with interest charges. The average credit card charges between 1.5% and 2% each month on the unpaid balance. That adds up in a hurry.
It’s one thing to not have enough money to pay off a balance. It might be even worse to forget to make a payment despite having the money in the bank.
To ensure you never miss a payment, take the following steps.
The easiest way is to allow your credit card to automatically withdraw the balance from your chequing account. Just make sure you’ve got the cash to cover it. If you do that, don’t forget to check your statement for any discrepancies.
It also helps to stop procrastinating. When your statement hits your inbox or arrives the old-fashioned way, take care of it immediately. Even if the payment isn’t due for another week or two.
Some people -- especially those with unlimited banking packages -- make sure to pay off any credit card purchases immediately. This might be overkill, but it sure beats paying interest.
Credit card interest is no fun. Be proactive to ensure you’re not carelessly paying more than you have to.
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