As you evaluate your credit card payments each month, you might fret over which credit cards you should pay and how much you should pay. Here are some guidelines to help you make those decisions. Keep in mind if you're focusing on getting out of debt, your payment plan might look a little different.
1. Make The Minimum On All Your Credit Cards
You should always make the minimum payments on your credit cards, no matter what. Anytime you pay less than the minimum, you're considered late. Not only are you assessed a late fee, your interest rate might rise making it more expensive to carry a balance. If your other creditors use universal default, those interest rates might increase too. Your delinquency is reported to the credit bureaus. A single late payment in your entire credit history might not do much damage, but the more delinquencies you have, the worse it will affect your credit score.2. Get Current On Any Delinquent Accounts
You should get caught up on any accounts that are behind. Again, as long as you pay less than the minimum, you'll continue to be assessed late fees and be reported late to the credit bureaus. If you have any extra money in your budget after making your minimum payments, put it all towards bringing your accounts current. If you're late for 180 days or more your creditor might charge-off your account or refer it to collections or both.3. Bring Maxed Out Accounts Below The Limit
Anytime your credit cards go beyond your credit limit, it raises red flags to current and future lenders. It causes them to wonder if you can responsibly handle credit. Plus, you face over-the-limit fees if your credit card charges this fee and you've opted-in to having over-the-limit transactions processed. Similar to getting current on your accounts, put your extra money toward bringing your accounts below their credit limit.
