I have 3 credit cards ( 2 are paid off) and I am paying on one card at this time. When I pay this card monthly, it appears that I cannot see a difference in the balance. A friend told me that if my minimum payment is $20.00 and I send $40.00 let the company know that the extra $20.00 goes to principal. Is it true if I pay on the principal that I will see a difference in the balance owe? Thanks.
2006-09-01 14:01:59 · 14 answers · asked by Who me? 3 in Business & Finance ➔ Credit
It doesn't matter how much you pay to the credit card. What does matter is paying the minimum on the card each month. You'll have to pay a late fee if you don't. Don't bother calling the card company requesting any extra be paid toward the principal because it already is. You are going to pay the interest each and every month regardless of how much you pay if it's not paid in full. My advise is pay off the card as soon as possible, then after that always pay off card in full before grace period ends (20-25 days from date of purchase). In other words use the card often but never use it more then you can pay off within grace period. This practice builds excellent credit quickly.
2006-09-02 00:48:35 · answer #1 · answered by Anonymous · 1⤊ 0⤋
I don't know what some of these people are talking about. Your balance IS the principal. Each month they figure your interest charge, and that combined with what you actually borrowed becomes the balance/principal for figuring interest in the next period.
If your interest rate is high, most of the minimum payment ($20.00) goes to interest, so paying double only reduces the balance by $20.00 or so.
2006-09-01 14:38:04 · answer #2 · answered by normobrian 6 · 1⤊ 0⤋
Paying more than the minimum is a good thing but I don't think that writing to them and letting them know to put the rest for the principal will do you much good. They will just use it towards your balance. The best thing? pay as much as you can to get it to zero balance. What they look for as far as your credit goes it late payments. They will charge extra and it will affect your credit bad in the future.
2006-09-01 14:13:44 · answer #3 · answered by peg 5 · 0⤊ 0⤋
Absolutely, it goes to the balance. You will pay down your card much quicker by paying more than the minimum payment. You will save a ton of money in the long run. Credit cards can be a blessing or a curse. Use them wisely, only charging what you know you can pay off fully.
2006-09-01 14:05:14 · answer #4 · answered by cjosoos 2 · 0⤊ 0⤋
Congratulations on paying off your debt! That's a huge accomplishment.
Keep paying your double payments on the credit card. If you can increase your payments even more. Push yourself to do it and you'll have it paid off even sooner. Then put all those payments in your savings account!
2006-09-01 14:10:10 · answer #5 · answered by Bluealt 7 · 0⤊ 0⤋
Its all nice on paper, but I also believe it also depend on when you are making a payment on you card. Paying it off when you get the bill is the best way, because every day it gets closer to the due date you are accumulating interest.
2006-09-01 14:27:24 · answer #6 · answered by Grandpa Shark 7 · 0⤊ 0⤋
Your friend is 100% correct....when sending extra payments for a mortgage.
I Would advise calling you creditor directly to insure the receipt and proper register of your additional payments.
2006-09-01 14:05:09 · answer #7 · answered by mauihillside 3 · 0⤊ 0⤋
Check your interest rate. If it is really high you won't see it go down that much when you make double payments. You would have to pay way more than that.
2006-09-01 14:09:37 · answer #8 · answered by Anonymous · 0⤊ 0⤋
Always pay above the minimum, so that the principle amount comes down
2006-09-01 23:34:50 · answer #9 · answered by Anonymous · 0⤊ 0⤋
most creditors require that u tell them IN WRITING that any over payments go to principle...usually one notice will cover all future payments so u dont need to send a notice each month
2006-09-01 14:09:23 · answer #10 · answered by sneaky41 3 · 0⤊ 0⤋