What should I do if I can't afford to pay my full balance?
If you cannot pay off your full credit card balance, ensure that you at least pay off the minimum balance.
You will still be charged interest on the remaining balance, but making the minimum payment is important to avoid penalties or late payment fees and make sure your credit score is unaffected.
Tips for making credit card payments
- Set up automatic payments to cover your minimum balance, so you never miss a payment!
- Consider setting up electronic alerts for upcoming payments.
- Add any automatic payments to your monthly budget to ensure you have allocated money for your credit card payments.
- To avoid missing payments, consider rearranging your credit card payment dates to match up with your pay cheque schedule.
Strategies for paying off your credit card
If you have multiple credit cards and you struggle finding a way to pay them all off, here are some options:
- Avalanche Method
- Start by paying off the credit card with the highest interest first.
- Pay more than the minimum payment for the highest interest card to bring the amount owing down, while you continue making the minimum payments on your other cards.
- This method allows you to save money by reducing the highest interest fees.
- Snowball Method
- Start by paying off the card with the smallest balance, while you continue making minimum payments on your other cards.
- After the smallest amount of debt is paid off, focus on the next smallest debt.
As the smaller debts are paid, there is more money available to pay off the larger debts.