Credit cards make purchases easy, but, sometimes, they make payments tough—and nothing affects your financial standing as much as your credit! Whether you just got your first credit card or you've had one for years and are trying to improve your credit health, know why you should pay your credit card bill on time. Today, we'll discuss this, as well as a few tips on how you can start. It's never too late to begin this great habit!
Why You Should Pay Your Credit Card Bill on Time (And How to Start!)
Prevent rising interest rates.
Card issuers can increase your interest rate if you've been missing payments. This can really add up—some interest penalties for late payments will rise up to 30%. If you pay on time, this won't be an issue.
Boost your credit score.
This is a big reason why you should pay your credit card bill on time. Of all the factors that make up your credit score, payment history—whether or not you've been paying on time—accounts for the biggest chunk: 35%
. That said, paying regularly and on time will help boost your credit score if you're just starting out, or will help repair it if you've been missing payments. And because your credit score directly affects your eligibility for loans, you will open up more opportunities for yourself with a stronger score.
Actually save money.
• Your credit score affects other things, too—for instance, your insurance rates. Insurance companies can charge you more when your credit score is higher, letting you save more money when you bring it back down.
• You'll dodge late fees on your bill when you pay on time! These avoidable fees are nothing but frustrating.
Set a schedule.
Technology makes it so you can set automatic payments to pay your bill. Through your online financial services, you can specify a recurring amount to be paid on a recurring date from one of your accounts (and you can always adjust the circumstances later). This way, you can sit back and relax while technology takes care of your payment for you—just keep an eye on it so it doesn't get away from you!
If you would still rather pay your bill yourself, set reminders to do so. You can do this a number of ways—on a paper calendar, on your phone's reminder settings, or through an app like Mint
Choose your own due dates (if possible).
Some credit cards allow you to choose your own due date. This might be helpful if your payments have been due right before you get paid for work and you'd rather them fall after payday. Check and see if this is a feature your card offers, and if it is, set it up!
Last but not least—follow a budget.
If you don't already have a budget in place, you might be surprised by how much you're spending once you put it down on paper (or on the screen, if that's your method). Track how much you spend and what you spend money on—as well as how much money you have coming in—and start setting some limits. Putting this in writing will help you really commit. And once you have a budget, paying your credit card bill won't seem nearly as daunting!
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Need credit card help? BluCurrent Credit Union
is right here in southwest Missouri! With our unbeatable loan options, 6,800 shared branches across the country, and fantastic customer service, we might be the perfect financial service for you. In addition to our three locations (two in Springfield and one in Nixa), we also offer online and mobile banking for your convenience. Plus, we provide nationwide ATM fee refunds with our checking accounts
! To learn more about our services and benefits, please stop by one of our branches or explore our website
. We would be happy to help you further understand the differences between banks and credit unions.