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Topic: Credit Card Payment Question
Username: STT757
Posted 2011-08-11 15:17:54 and read 1035 times.

I want to pay down a credit card, to do so I'm going to make extra payments each month. Do I need to contact the bank to let them know I'm making extra payments, or could I just denote when I make the payment to put the payment "towards the principal."? I want the extra payments to go towards paying down the principal, not the next month's payment.

[Edited 2011-08-11 15:19:16]

Topic: RE: Credit Card Payment Question
Username: fr8mech
Posted 2011-08-11 15:33:58 and read 1014 times.

Not sure exactly what you're getting at. When you pay more than the minimum payment on a standard credit card, you are paying to the principal.

As I read your post again, I'm thinking you will be sending more than one payment per billing cycle. Really, the same thing applies. Anything you pay will eat the principal. You should still have a minimum payment come next month.

A while ago, when I was trying to build miles on a credit card, I used it as a debit card. I just made an electronic payment to the credit card issuer once a week to cover the purchases made the previous week. I never carried a balance, but I don't really see that as an issue.

Topic: RE: Credit Card Payment Question
Username: 474218
Posted 2011-08-11 15:35:29 and read 1011 times.

Any payment amount above "minimum monthly payment" goes to payoff the principal.

Topic: RE: Credit Card Payment Question
Username: LAXintl
Posted 2011-08-11 16:23:04 and read 980 times.

A credit card is not a mortgage.

The interest meter is always running, so whatever you pay goes to pay down the total sum of principle plus daily accrued interest.

Also I'm not sure why bother with two physical payments. Why not simply send more when you pay the bill regularly?

Topic: RE: Credit Card Payment Question
Username: MWHCVT
Posted 2011-08-11 18:03:06 and read 936 times.

I am not 100% sure about the credit card system in the USA but I worked for a credit card provider in the UK for a couple of years and basically you have a billing cycle, say your bill is made out on the 1st of the month, any payment that you make after the bill has been issued will be counted as a payment towards that bill until the next bill is issued on the next 1st of the month..Just be sure to make at least the minimum payment due before the payment due date...

It will also be worth checking how payments are assigned, some providers will assign your payments against the lowest interest balance first where as others will pay of the balance gaining the highest interest first.

Also if any are available check for 0% or low rate balance transfer options as it may be worth transferring to one of these accounts to reduce your interest payments if available to you

Hope this helps

Matt
MWHCVT

Topic: RE: Credit Card Payment Question
Username: moose135
Posted 2011-08-12 06:52:02 and read 847 times.

Quoting MWHCVT (Reply 4):
It will also be worth checking how payments are assigned, some providers will assign your payments against the lowest interest balance first where as others will pay of the balance gaining the highest interest first.

I don't know if all cards are the same, but one that I have (in a recent update on terms) says that any payment above the minimum amount goes toward the highest rate charges. While I don't know if others are the same, I'm thinking it may be required by banking regulations, as that doesn't sound like something they are doing out of the goodness of their heart.

Topic: RE: Credit Card Payment Question
Username: StarAC17
Posted 2011-08-12 07:32:45 and read 839 times.

Quoting STT757 (Thread starter):
I want to pay down a credit card, to do so I'm going to make extra payments each month. Do I need to contact the bank to let them know I'm making extra payments, or could I just denote when I make the payment to put the payment "towards the principal."? I want the extra payments to go towards paying down the principal, not the next month's payment.

For simplicity I would save the money you plan to pay this bill in a savings account where you can get the highest interest rate and not have to lock in money, so at least you are accumulating something (most of these accounts compound daily but report monthly). When it comes time to pay this bill transfer this money to the account you typically pay with. As long as you have a balance on a Credit cars you are paying interest on that balance, IIRC paying extra just goes to paying the total balance and not just interest.

Hopefully you don't have a lot of debt and can get out of this mess, CC debt is the worst debt one can have. If you have been making at least the minimum payment each month see if the bank would give you a line of credit equivalent to the balance on the CC and then pay if off ASAP and concentrate on paying off a lower interest line of credit, where you can pay at will essentially.

As long as you have been making the minimum payment you should still have pretty decent credit.


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