The first thing you want to take note of is the interest rate charged, known as APR or Annual Percentage Rate. There is a section on your credit card statement titled Finance Charges. The Periodic Rate is the rate for the billing period, usually monthly. The APR or Annual Percentage Rate is the yearly rate of interest. Credit card companies may increase the annual percentage rate if you pay late or go over the credit limit. On the statement, you will notice any over limit or late fees. Currently, a good rate of interest is 9.9%. If you are paying above that, you may be doing so because they consider it a "high risk" account. High risk accounts can mean you have a low credit score, you have made payments late on your card, you've gone over the limit or the initial lower rate was an introductory rate for a certain period of time. Very few people read the fine print inserts that are mailed with their statements and rarely realize that their interest rate has been increased by five, eight or even TEN percentage points.
It's best to payoff the accounts with a high APR first, by making larger payments than the minimum due on the statement.
Look at the amount of the last payment you made. You can find this on the statement. Take the previous balance amount and minus your payment. Take that total and subtract it from the new balance amount. This is how much you've paid in interest and fees. Interest and fees are also broken down on the credit card statement.
Example: Previous Balance is $500 and you pay $50
$500 - $50 = $450
New Balance (on statement) is $475
New Balance (on statement) is $475
$475 - $450 = $25
You paid $25 in interest and fees for the monthly period.
The above is just an example but is an easy way to see how much money you "gave" to the bank from each payment you've made. Some credit card accounts don't allow you to close the account until the balance is paid in full. This is especially true with accounts where you are paying a monthly service or maintenance fee.
I'll do another blog at a later date on how to read the fine print on the backside of your credit card statement.
You paid $25 in interest and fees for the monthly period.
The above is just an example but is an easy way to see how much money you "gave" to the bank from each payment you've made. Some credit card accounts don't allow you to close the account until the balance is paid in full. This is especially true with accounts where you are paying a monthly service or maintenance fee.
I'll do another blog at a later date on how to read the fine print on the backside of your credit card statement.
