If you have credit card debt, you are not alone. Most American consumers carry some type of consumer debt. Even if you don’t carry a large amount of debt, it can be easy to use your cards for higher-priced items. Fortunately, there are ways to avoid having an unhealthy relationship with credit, such as paying off your credit card debt before the grace period expires.
Paying off credit card debt during the grace period
One of the best ways to pay off credit card debt is to take advantage of the grace period. You have two months to pay off the balance on your statement, and if you pay it off in full before the grace period ends, you won’t have to worry about paying interest. However, if you don’t pay your bill on time, the grace period will expire and you’ll have to pay interest on your new purchases.
You’ll find the grace period for your card on its rates and fees page or its terms and conditions page. Typically, it’s listed near the APR. If you’re unsure, you can call customer service and ask. This grace period gives you a little extra time to pay off your debt and improve your credit score.
The best way to avoid paying interest during the grace period is to pay off your credit card debt in full each month. If you miss the due date, you’ll be subject to a late payment fee and an interest rate increase of about 10%. Moreover, credit card grace periods only apply to those who pay their bills in full each month. If you’re not able to do that, you’ll be charged interest immediately on your new purchases.
Building a good relationship with credit
Credit cards are becoming a virtual necessity these days. They are required for many transactions and are an integral part of building a good credit history. However, it is important to manage your relationship with credit cards so that you don’t end up with a poor credit score.
Signs of a healthy relationship with credit
Having a good credit score can help you make smart financial decisions. With a high score, you can get loans with low interest rates that you can use to improve your life, such as a mortgage. You can also get a student loan or a personal loan to consolidate your debt. If your credit score is below average, you might find yourself unable to get the loan you want or need.
Signs of an unhealthy relationship with credit
Having an unhealthy relationship with credit can be stressful. There are a few ways to keep yourself out of trouble. One way is to pay your balances in full, rather than paying minimums. Not knowing how much you owe is an indicator that your relationship with credit is unhealthy. Another way is to have a tracker or spreadsheet of your credit balances.