Save some money with your credit card balance
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Did you know that you can make multiple payments to your credit cards over the same billing period? Taking advantage of this feature will accelerate your credit card balance payoff…
This simply works because credit card companies compound the interest owed daily, meaning by waiting to pay once a month interest is charged on previous interest. To minimize this impact, I would suggest that you pay the same amount on a total month but by making more frequent payments during the month.
Example:
Credit Card Balance of $10,000
Annual Interest Rate of 18.0%, compounded daily
Monthly Payment amount of $100.00
Saving $6.53 per year by sending 36 payments of $33.33 vs. 12 payments of $100
Here is a monthly table that shows you the impact:
I know this doesn’t sound like much, but if you have a balance on your credit card and you pay your bills online this will be the easiest $6.53 that you can save. Please make sure you check the payment policy of your credit card company to ensure you don’t get nickeled and dimed on another charge.
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3 Comments on this post
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lulugal11 said:
So when you pay like this then does that affect the minimum payment that you have to pay?
October 21st, 2008 at 10:00 am -
Budgets are Sexy said:
that’s pretty tight! good looking out
October 21st, 2008 at 4:00 pm -
Finance Puzzle said:
It will not reduce your minimum payment, that is usually calculated as a percenrtage of your balance…it just helps from a saving and budgeting perspective…
October 24th, 2008 at 9:03 am
