You have debt. I have debt. Most everyone has debt. And you’re wondering what’s the best way to manage your debt? Is it better to pay off debt or make payments? How much of a difference will it make in interest charges? And will it affect your credit score? 

In this article I go over the options and how you can make the best choice.

The most important thing:

The number one most important thing you need to do is. Make any and all payments on time. Above all being on time and having a good credit history are the biggest factors in keeping a good credit score. Whether you pay all at once, or you pay monthly, being consistent is the most important thing.

If you are able to pay off debt, then, of course, do it. Making payments over time will only cost you more money. For example: You have a credit card with a balance of $500. You have the money to pay it off. So just pay the $500. If you make payments just to build some credit history here’s what you pay.

Let’s say for example you pay $50 per month. A $500 credit card balance will take approximately 10 months of $50 and one month of $45. (Based on 18% card rate This calculation came from Bankrate.com). In other words, you’re paying an extra $45.

Yes, it will show a responsible payment history. However, you can make a purchase each month and pay your bill on time in full. This will create the same good history and won’t cost you any interest.

Other factors:

Keeping track of credit utilization: How much of your available credit are you using? Another key factor in determining your credit score is, what your balance is compared to your available credit. Keeping this ratio low is a good idea. A utilization rate of 30% or lower is suggested.

Consequently, if you pay off a card this can help your score. (Providing you keep the card open). If you do pay a card off. Be sure to make an occasional purchase with the card. If your credit card is canceled due to inactivity this will hurt your credit score.

So Back to the question:

Is it better to pay off debt or make payments? Let me offer an example. Say for instance you just opened a new credit card that has a 0% introductory rate. Of course in this case there’s no big rush to pay it off. Just be sure to keep track of the promotional period. you want to try and have it paid off by the time the interest rate jumps up.

Here’s a great thing to do is. If you do have a credit card with a low rate. Take the money you’re saving on interest during the promotional period. And pay extra on any other cards you may have. Try working on getting your higher rate cards paid off. This can help greatly with paying down credit card debt.

What if you decide making payments is your best option?

OK so you’ve weighed your options and you decide that you want to make payments.

Here’s a suggestion. Get a 0% interest rate card. You can find cards that offer a 0% interest rate for a promotional period of time for new cardholders. If you take the balance from the card you are thinking of paying off and transfer it to the 0% rate card. You will save a lot of money in interest. You may have to pay a balance transfer fee. However you will still save money in the long run.

You can spread your payments out to equal the number of months of your promotional period. Be sure to make all payments on time and don’t make any new charges. Also, be sure to pay the card off before the interest rate goes up. As a result at the end of the time period, you will have created some good payment history. This can, of course, help with raising your credit score.

Ultimately this is your choice:

If you choose to pay off some debt without leaving yourself short then the best advice I can give is, go ahead and do it. Making payments over a period of time just to help build a credit history can be expensive. Interest rates are high these days. Furthermore, you may not be helping your credit score any more than just paying off a card. Which by doing so can help your debt to available credit ratio.

Hopefully, this helps with the question: Is it better to pay off debt or make payments. Just remember you can build a credit history by making a purchase each month. And then paying off the card in full every month. This is the way I do it. I pay my cell phone bill each month with a credit card. And then I make an automatic payment to my card each month from my bank account.

What to keep in mind:

Remember, the most important element to keeping a good credit score is making all your payments on time. Whether you pay all at once. Or you take your time. Being on time will help your score more than anything.

Also, think about applying for a low rate card. Try and find one with a 0% introductory rate. Transfer your higher rate cards over to your new 0% rate card. Pay on time every month. And try to have the balance paid down by the end of the promotion. This way paying over time won’t cost you anything. And you’ll build some good credit history.

When considering Is it better to pay off debt or make payments make a list of pros and cons.

The pros: You’ll save money if you pay off your debt.

Pro: Your balance to available credit ratio will go down (which is a good thing) lowering your ratio can improve your credit score.

Pro: It will just feel good. (I always get a good feeling when I pay something off).

Pro: You have one less thing to worry about.

Con: There are not a lot of cons here. There’s only one. Don’t pay your cards down with money that you need in your monthly budget. Yes paying off a card can be great. However, if it leaves you short and you end up not paying something somewhere else then this defeats the purpose. Do the math. Can you afford to pay off a card? Don’t leave yourself short.

So is it better to pay off debt or make payments?

You make the call. You’re in charge of your debt. Hopefully, this gives you the information you need to make the right decision.

Considering getting a low or 0% interest card? Check out our best current deals here.

Check out this video below

“Is It Better to Pay off Debt or Make Payments?”  

Click here to get our best current credit card deals based on lowest APR.

The post Is It Better to Pay off Debt or Make Payments? appeared first on Affordable Credit Card.

The short answer:

Applying for to many credit cards can raise a red flag. One credit card every 3-4 months is recommended. However, if you do apply for 2 cards at once it won’t ruin your credit. That being said it’s not recommended.

Every time you make a new application for a credit card a hard inquiry is recorded. This just means a credit card company requests your credit report for the purpose of issuing you a credit card. Your credit score will generally go down by 3-10 points with each new application. Consequently, too many inquiries can hurt your credit.

A hard inquiry is recorded for any application for credit. For example a car loan. Or a mortgage. Therefore you need to keep this in mind when considering applying for any credit.

OK so now the good news:

The good news is that handled correctly you can increase your credit score. Getting a new credit card will probably cause your credit score to go down a little.

However, your balance to available credit ratio will be improved. How much debt you carry compared to your available credit is a factor in determining your credit score.

For example, you have a credit card with a $5,000 limit. And you have a $3,000 balance on it. This amounts to a 60% usage or ratio. If you apply for and receive a new card. And let’s say it has an available limit of $5,000.

This would amount to a combined available credit limit of $10,000. Therefore your new ratio would be 30%. Now assuming you don’t run the balance up on your new card you should see an improvement in your credit score. Not right away, but after a while.

Your credit ratio is not the biggest factor in determining your credit score. However, it does come into play. Keeping it low is a good idea.

OK so back to the question how often can I apply for a credit card?

There are some other factors to consider. How good is your credit? If you have a score of 770, then a drop in your score of 6 is not that significant.

However, if you have a score of 660 a drop of 6 can hurt a little. So when asking the question how often can I apply for a credit card. Take into consideration your own situation.

Check out this chart. If you are on the borderline for dropping down to a less desirable bracket you need to be careful. That is to say, fewer applications would be advised.

If you don’t know your credit score Click Here to get it for free. It wont hurt your score to just check. This is free from Discover Card.

You need to check your credit score before any large application for credit. If you feel your credit isn’t good enough to apply for a top rated card, then apply for a card that’s easier to get. If you’re turned down for a card this will make it harder for future applications.

What if You want to apply for several cards at once?

As mentioned before this is not suggested. However, if you need to apply for more than one card at a time for whatever reason. It’s best that you do it all the same day. This way hopefully your activity won’t show up on each check of your credit. In addition, don’t apply to cards from the same bank.

Sometimes you run across a card that you just can’t pass up. Yes, you can go ahead and apply for it. Just keep in mind, it will affect your credit score. Be prepared to see a drop in your score. However just make your payments on time don’t run up your balance. And your score should go back up in just a little while.

Ultimately this is your choice:

As stated previously your credit score will make a difference. If your score is high, you can apply more often. If your score is a little lower, say in the mid-range. You may want to apply a little less often.

This is where keeping track of your credit score can help. Check your score before you apply for a couple of cards. And then check your score afterward. Then you will know exactly where you stand. Once your score rebounds you can then apply for more credit.

Think ahead: If you’re planning on buying a new car or applying for a mortgage make sure not to apply for credit cards for 4-6 months prior to a major purchase. You don’t want a temporary drop in your credit score to hurt your chances on getting a new house.

Thinking of applying for a new card? Check out our list of “Best Credit Card Deals” Find the best cards based on the lowest annual percentage rate.

To sum it up:

Keep your credit score in mind when considering applying for a new card.

Be aware that with each new application of credit your score will probably go down.

It’s a good idea to check your credit score before and after each new application.

Be careful not to run up your balance on a new card.

In addition you should wait 3-4 months in between new applications for credit

Be patient, make all payments on time and your score will rebound.

OK so hopefully this helps with your question. How often can I apply for a credit card.

Check out this other article “How Much Of My Credit Card Should I Pay Off” In this article I share some more tips on how to improve you credit score.

Check out this accompanying video “How Often Can I Apply For A Credit Card”

Click here to get our best current credit card deals based on lowest APR.

The post How Often Can I Apply For A Credit Card? appeared first on Affordable Credit Card.

In this article I will be going over this and how it may affect your credit score

The short answer:

The best option for paying off your credit is to pay them all off. However, most people carry a balance from month to month. And of course, this involves you paying interest on a monthly basis.

So the short answer is that you pay as much as you can and still be able to live month to month and have extra money for emergencies and savings.

At the very least you need to pay the minimum amount due.

Don’t think that if you pay at least a portion of your bill that the credit card company will be happy with that. They will charge you a late penalty. And then the next month you will owe the minimum plus the previous portion of the last months’ payment that you didn’t pay.

Don’t take this personal. This is all computer generated. That is to say there’s no one person looking at your account making this decision.

What if you’re short one month:

So what about if you are short. Well first off don’t panic. However you need to take a proactive approach.

Call your credit card company. Look on the back of your card. There you will find an 800 number. Dial it up. You will get a recording. They will probably want you to type in your card number. So go ahead and do that.

Sometimes if you just push zero, it will send you to a service representative. If not then just wait for all the options. It may take a while. Usually, it’s the last option.

They want to help you with automated intelligence if they can. A recording is cheaper than a live person.

So once you get a live person on the line, then just tell them your dilemma. You don’t need to go into a lot of detail or excuses. Just tell them you’re short (hopefully temporarily) they will then tell you what they can do for you. This is a much better approach than just waiting until the next month.

This may even prevent you from being reported to FICO. You can even ask them. Can you not report me to FICO? So yes this is a good idea. Above all be proactive with your debt management.

How much should you pay off:

So back to the original question. How much of my credit card should I pay off?

The amount of debt you have compared to the amount of available credit you have can effect your credit score. If you have a credit card with a limit of say $5,000 and you have a balance of $4,800 this can have an adverse affect on your score.

You want to keep your ratio of balance to available credit as low as you can get it.

Preferably you want your balance to be no more than 30% of your available credit. Consequently if you have a credit card with a $5,000 limit. You should try to keep your balance below $1,500.

This isn’t to say that you can’t have a ratio of 50% or 60%. However, the lower your ratio, the more likely your credit score will improve.

If you have more than one card then your overall ratio is a factor. In short just try to keep your ratio low.

How much you pay is ultimately your decision:

If you have more than one card you, would, of course, want to pay the higher interest bearing cards quicker. So if you are able to pay more than the minimum, paying more on the higher rate cards is a good idea.

Also having a plan to pay your cards down to the point of having a debt to available credit ratio of 30% or less is a good idea

The number one factor in determining your credit score:

The most important thing to do is. Pay any and all cards on time. Paying with regularity is the most important factor in determining your credit score. If you don’t mind having your payment coming out of your account automatically. You can set up an automatic payment through your bank account.

If you’re afraid you’ll forget about it and you’ll overdraw your account then set up an alert. You can receive an email when the payment is about to be sent. And you can also set an alert to let you know when your account balance falls below a certain level.

However, sometimes you may not see the email in time. And the email doesn’t usually go out the same moment your account becomes low. (Just so you know).

This is something that you need to remember.

You don’t want to overdraw your account in an effort to be on time. This would defeat the purpose. So if you don’t want to set up an automatic payment. You can set some sort of reminder.

Set up a text message to yourself. Or if you prefer, send yourself an email each month several days before your payment(s) are due.

Whatever you need to do to remind yourself to pay your bill on time, do it.

Credit card debt can be expensive:

Interest rates are very high in this day an age. And it can run into the hundreds of dollars each month. It can seem like you aren’t making any headway at all on your balances. Consequently coming up with a plan you can live with is important.

Lowering your interest rate:

Getting a lower interest rate can be as easy as contacting your credit card provider and just asking. Can you lower my interest rate? If you are a good customer, and you’ve been paying on time. It’s possible you could get a lowered interest rate. And if they say sorry no. It didn’t cost you anything to ask.

Check out some other cards:

Click here to check out these cards Getting a lower interest rate. Or even a 0% interest rate can help you pay down your credit card(s) a lot quicker.

Getting a new credit card can lower your credit score. However paying down your overall debt can, in the long run, improve your score.

So, in the long run, getting a lower interest rate card can help you. It will help you pay down your debt and that will in turn help with your credit score.

So hopefully this will help with your question:

How much of my credit card should I pay off?

To sum it up:

Work on paying the higher rate cards first.

If you can, pay more than the minimum.

Try getting 0% rate cards and transfer your balance(s)

And work out a plan you can stick to.

Check out these great deals on lower rate cards

Click here to get our best current credit card deals based on lowest APR.

The post How Much of My Credit Card Should I Pay Off? appeared first on Affordable Credit Card.

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The Discover it Cash Back

With the Discover it Cash Back card you’ll enjoy 0% interest rate on purchases and balance transfers for the first 14 months. Then 14.24%-25.24% Standard Variable APR applies. Also you receive match of all cash back earned through the first year. And there’s no annual fee. 

visit Discover to learn more

The Barclaycard Ring

With the Barclaycard you enjoy a 0% intro rate for the first 15 months on balance transfers made within the first 45 days of account opening. After the introductory period they offer a reasonable variable APR of 14.24%. And no annual fee 

visi barclaycard to learn more

How much of my credt card should I pay off?

This is a good question. And a question I’ve seen posted before. In this article I give the answers with the reasons.

Read More

Is it better to pay off debt or make payments?

Making payments and having a good credit history are important. So which is better? To make payments or to just pay off debt?

Read More

Check out this video

Helping you to save money and get out of debt!

Bruce Merrian

Credit Expert

The post Best Current Credit Card Deals appeared first on Affordable Credit Card.