5 Strategic Ways to Make Multiple Credit Card Payments

If you possess multiple credit cards, there’s an important decision you need to make every month – how should you make the payments that are due on the various pieces of plastic? Should you pay the minimum on each card, or should you pick a particular one and pay off the balance completely?

Here are some tips to incur the least amount of expense.

1. Make the Minimum Payment on Each Card: If you own more than one credit card, first of all, you should ensure that you pay at least the minimum amount due on each card. Unless you do so, you may be charged a late fee. Moreover, the card company could increase your interest rate or report you to the credit bureaus. This, in turn, would cause your credit score to take a hit.
   
   
2. Take Care of Any Overdue Accounts: Once you’ve paid off the minimum on all cards, you should check if any card has an overdue payment and concentrate on getting that off your account. Until you do this, the card company will continue to charge you a late fee and refuse to lower your interest rate. And if you are more than 180 days late, your issuer may charge off your account or refer you to collections. Either of these actions could further ding your credit score.
   
   
3. Pay Off Maxed Out Accounts: By doing this, you can bring your balance below the credit limit. Whenever you make a transaction that causes you to cross your authorized limit, you are charged an over-the-limit fee. Moreover, you also give out negative signals to prospective and current lenders. Such an act makes them feel that you may not be equipped to handle further debt. Thus, if you have any budget left over after remitting the minimum due on each card and paying off any past due accounts, you should use it to reduce the balance on maxed out accounts.
   
   
4. Reduce High Balances: At all times, the proportion of your used credit to your total available credit (your credit utilization ratio) should remain below 30%, or it could hurt your credit score. In fact, for optimum results, it is advisable to maintain a credit utilization ratio of 10%. Thus, another way in which you can allot your credit card payment budget is by trying to bring down high balances.
   
   
5. Pay Off Steep Interest Rate Cards: If you’re carrying a balance on a card that charges a high rate of interest, try and pay off the balance on that card, as it may save you hundreds of dollars in finance charges. This will then make it easier for you to reduce your debt load.

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