Credit card interest rates are at record-high levels right now. The national average is currently 17.6 percent, according to Bankrate.com. Rates are even higher for store credit cards and for those with a poor credit score. And financial experts expect interest rates to continue climbing in 2019.
So, if there ever was year to make paying down your credit card bills a New Year's resolution, this is it.
To make a dent in that costly balance, you’ll need to pay more than the minimum.
"Making the minimum payment does very little to help out – it either keeps you running on the treadmill in place or sends you backwards,” said Bruce McClary, vice president of communications at the National Foundation for Credit Counseling. "If you're still using that card to make charges and you're only making the minimum payments, you're letting your balance grow, potentially beyond what to repay, so stop spending, start paying down and start thinking of other ways to take care of your purchases without relying so much on credit."
One more tip: Pay your credit card bills on time, all the time. Payment history is the most important factor used to determine credit scores. A single late payment of 30 days or more can cause your score to drop by 100 points or more. And it will take a very long time to erase the damage.
If you can’t pay off the balance in full, at least make the minimum payment that month. It’s much better than paying late.
This is one option for federal government employees who did not receive a paycheck and have credit card bills coming due. Make the minimum payment this month to avoid the consequences of a late payment.