Using a credit card with a zero percent introductory interest rate is a great way to get the ball rolling and build credit scores quickly. You can use a credit card minimum payment tool to figure out how much your minimum monthly payment should be or even lay out the math behind both the introductory interest rate and the 2-Year Average Yield on your preferred credit cards. However, if you have a very small unpaid balance (e.g., less than $ 1000), your credit card minimum payment may just be a lump sum, sometimes nothing more than an extra credit limit every time you use your card. In this case, it may not really make any sense to increase your payments during the introductory period at all!
Here's another scenario: you've been faithfully paying your credit card minimum payment every month, and you've yet to see any significant increase in your credit scores. So naturally, when the bill comes in the mail and you find that it's already several thousand dollars over your minimum payment, you may start to panic. You've now found yourself caught in the trap of high interest, low credit limits, and a steadily increasing late fee burden.
What can you do to get out from under this debt trap? First, look beyond the minimum credit card minimum payment to other ways to pay off your balance. Paying only the minimum amount may keep you in the same frustrating cycle, but it will definitely not help you one bit in lowering the interest rates you're paying. And by keeping that payment just about at or just below the total amount of your outstanding balance, you'll keep a little bit of cash in your pocket at all times, which is always helpful.
But once you've started paying more than your minimum credit card minimum payment policy allows, then maybe it's time to reevaluate that plan. Usually, a credit card company will be willing to renegotiate their terms on minimum payments. But don't expect to get everything you're requesting – they have to see some revenue from you first. So be sure you understand what your credit card company's current policies are before you start negotiating.
What if you really need to pay off your balances in full? You'll have to negotiate with your credit card issuer, of course. The key issue is to raise your credit card minimum payment to a level where it matches the amount of money you owe overall. For most people, this amounts to about two to four percent of the outstanding balance. If you have enough unsecured debt, this might be easier said than done, but it can be done.
One way to raise your credit card minimum payment is to find a good credit counseling company. These companies have been known to be effective in negotiating with credit card issuers. These companies are usually affiliated with either a credit counseling agency or an actual bank. Once you've found a . . . . . . company to work with, it's important to understand how much of your balance needs to be paid off in order to move your balance closer to paying off the balance owed. Sometimes just increasing your minimum payments will do the trick.
The other way to raise your credit card minimum payment is to improve your credit scores. The best way to increase your credit scores is to make your payments on time and in full. Even if you do occasionally miss a payment, the amount of time you pay your bills counts in the calculation of your credit scores. Moving your balance closer to the minimum payment will increase the amount of time your credit scores take to move up as well.
Regardless of which method you choose to pay off your balances, always be sure to make your payments on time. Remember, your credit card issuer is likely aware that you've moved your balance to a lower interest rate. They may be willing to negotiate additional terms with you. If they're not, you could end up paying a lot more for the privilege of making lower payments. You don't want to enter into a negotiation with your credit card issuer until you understand your options.
Do not hate those who say bad things to bring you down, because it is they who make you stronger every day. Just because someone else is not nice to us, doesn't mean we have to reciprocate in the same way. One of the best things in life is seeing a smile on your parents' faces, and realizing that you are the reason.
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