Many people ask me about various payment strategies to eliminate debt. So in this post, I’ll offer some guidance on how to effectively reduce debt and keep your finances strong.
Specifically, let me answer the following question someone recently asked:
Q: Can you reduce the payoff on a credit card by paying bi-weekly or weekly rather than monthly such as with a home mortgage?
A: Actually, yes, you can make payments every two weeks on a credit card bill, just like some homeowners do with their mortgages.
Benefits of making bi-weekly credit card payments.
Not only will this help you lower your principal balance faster, but you’ll also save money on interest charges.
Some credit card companies begin imposing finance charges from the day you make a charge.
So if you charge something right at the beginning of a billing cycle, and wait until the payment due date, or the beginning of the next billing cycle to make a payment, you might end up paying up paying roughly 30 full days of interest.
By contrast, if you make a payment two weeks into your billing cycle, and then another payment two weeks later, you’ve gotten the benefit of that earlier payment knocking down some of the finance charges.
The key with bi-weekly payments though, is to always make sure you’ve paid at least the minimum payment due by the due date.
Is debt consolidation right for you? Read this article.