This may seem obvious, but making your credit card payments on time is very important. It’s not just about the late fees, either.
In today’s episode of Your Money Minute with Tracy Stewart, CPA, I want to talk with you about why it’s important to pay your credit cards on time. Late fees can really sting — often charging you a penalty and voiding out any promotional perks you have with your account (like no minimum payments or no or low interest rates.) But your late payments can also trigger other ouches and owwies, too.
Say, for example, you pay your MasterCard account on time, but fudge the payment on your Visa by a few days. It’s a known fact that MasterCard may raise your interest rate because you had a late payment on another account. How did they know? Easy — they monitor your credit report.
While we’re talking about your credit report… I’ve also heard more than a time or two that, if you make your payment between the 1st and the 15th (even if it’s a minimum payment,) it can help give you a bump on your credit score.
To make sure you pay on time, consider using auto-payment options using your checking account. Spare the stamps and avoid missing payments: Auto-payments will make sure your accounts are paid on time, every time.
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