Pay Every Two Weeks

• Call your credit card company and ask if they will allow you to split your minimum monthly payment in half and make those half payments every two weeks instead of the full payment once a month. Some companies allow it, and chances are good that you won't need to sign any agreements to make these bi-weekly payments. Make your payments online so they are instantly registered with your credit card company. There are two reasons for paying every two weeks instead of once a month; the first is to reduce the principal and the other is to pay less interest. Most credit accounts start figuring interest on the first of the month. This means that your interest obligation for the month is lowest at the beginning of the month. If you make a half payment close to the beginning of each month by paying every two weeks, then you are paying more to principal than to interest because the interest has only been calculated for a few days. This means you pay less interest on your account. The other reason for paying every two weeks is that by year's end you would have made 26 half payments to your account, which is actually 13 monthly payments instead of just 12.
  
  

Pay Off Your High Interest Cards First

• If you are looking to develop a plan to pay off your credit cards, then start by paying off those with the highest interest rates first. Make a list of your credit card debt putting them in order from highest interest rate to lowest. If you have two cards with the same rate, then use the balance due as a sub-heading to list them. Then start applying your extra bill money each month to the card at the top of your list, and work your way down. Higher interest rates accumulate interest debt faster than the lower rates. Paying extra to these accounts will help to reduce the principal allowed which also helps to lower the interest debt on the account as well.
  
  

Avoid Buying Consumables on Credit

• One of the ways that people get themselves into credit trouble is that they purchase things such as groceries and computer printer ink on credit. Use cash for consumables on credit. Those groceries you bought on your card this week will have interest attached to them and stay on your account, collecting interest, until you pay the card off. In the meantime the groceries are gone within a week. If you must use credit, only use credit for items that will be around after the card is paid off.