Why Pay Off Credit Card Debt ?

Why Pay Off Credit Card Debt ?

Due to the credit limit facility of your credit card, you tend to think of putting off paying your credit card bills in case your cash flow is less. However, if you do not curb on your spending habit even during the cash flow shortage, you may end up in a financial mess. The better option would be to budget your expenses taking into account your minimal monthly expenditure and liabilities and then spend within your means. Moreover, it is better to pay your credit card bills on time and not accumulate till it reaches the maximum credit limit.

The following are some of the reasons why you should pay your credit card bills in a timely manner.

    • Credit card companies send your pending payment details to a debt collection agency if you overshoot the maximum time period of payment. This puts a black mark to your account history. You can avoid this by making your payment on time.
    • Credit card companies levy a penalty fee for late payments. This would only increase the expense you incur and add to your financial burden by delaying your payment time.
    • If you do not pay the pending amount within 60 days, the credit card issuer is authorized to increase your interest rate. Hence, you can avoid paying high interest rates by making timely payments.
         You can increase your credit score by making prompt payment. This would also reflect on your insurance rates as insurance companies look at your credit score to fix the premium rate.

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