Responsibly managing credit card accounts is an excellent way to build and maintain a good credit score — just as charging more than you can afford to pay off is a surefire way to hurt your credit score.
If you’re looking to protect your credit, follow these five tricks to ensure you pay off your credit cards each and every month.
1. Don’t settle for the minimum
If it’s within your financial means, don’t simply make the minimum payment each month. Sure, paying the minimum is all you’re required to do, but don’t stop there. Make a habit of paying off the entire balance. When you don’t carry debt month to month, you don’t pay interest.
2. Treat a credit card like a debit card
It may seem obvious, but it bears repeating: Don’t use your credit cards to spend more than you can afford. If you’re having a difficult time with this, try treating your credit card as if it’s a debit card. Don’t swipe any plastic unless you know you already have the money in your bank account. This mindset may help prevent costly impulse buys.
3. Set up automatic payments
If your credit card payment problems are more about organization than spending, set up automatic payments. The amount you owe will be deducted from your bank account each month, without any action on your part, so you’ll avoid that last-minute stress of getting your payment in on time. Just ensure you have sufficient funds in your account to cover the payments without incurring overdraft fees.
4. Remind yourself
If you don’t think you’ll remember to pay on your own and you’d rather not use automatic payments, there’s a third option: text, email or other push notifications from your credit card provider. This can include balance, payment and/or statement notifications. Of course, you don’t have to wait for such a reminder. Act as your own notification system and pay off your credit card after every purchase you make (or at least more often than once a month). Paying it off quickly may be the best tracking system, and if you know you’ll need to pay right away, you may be discouraged from charging too much in the first place.
5. Keep your balance low
Finally, if you maintain a low credit card balance, it’ll be much easier to pay off. You don’t want to stop using your card entirely—after all, credit card use is essential to building credit. Instead, set aside your credit card for certain purchases (online transactions only, for example).
Limiting your purchases — as opposed to putting everything on your card — will not only leave you with less to pay off at the end of the billing cycle, it will also mean you’ll be using a smaller portion of your total credit limit. Keeping your credit utilization ratio low can boost your credit score.
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