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Credit Card Bill Pay - Credit Card Payoffs

prepaid paying cards payment

In the ongoing quest for consumer convenience the traditional paper billing and payment system is on its way out. Credit card bill pay systems are working their way into the mainstream. For consumers waiting to set up electronic bill pay you can still use the convenience of credit cards to pay bills online.

Paying bills online with a credit card can be convenient. It can save you money by avoiding late fees and other charges. Instead of depending on the mail system for your payment to arrive by a given date, most payments are processed immediately or within a short time. It’s important for any debt including your credit card bill to pay on time but consumers should be aware of the money traps created by paying bills with a credit card.

Credit card holders pay a fee in the form of a percentage of interest on balances on a credit card. Those rates can be as high as 25% or more. In other words, it is hardly worth paying a bill if you are simply creating more debt with high interest on your credit card bill. You should avoid paying a bill with a credit card unless if it absolutely necessary. There are two ways to avoid that trap.

First, consider using a prepaid credit card. Prepaid cards work like a credit card. Most come with the Visa or MasterCard logo. If you need to make a credit card bill pay transaction, it makes more sense to use a prepaid card. The biggest difference between a prepaid card and the typical credit card is the interest rate. Look at your credit card statement and read what you owe, what you are repaying and the length of time for repayment. For some consumers, the dollar signs are shocking. On the other hand, prepaid credit cards provide a few more options regarding fees for use. Most offer reasonable rates costing a fraction of the money credit card companies charge. Many financial institutions and stores offer prepaid credit cards.

Another way to keep your credit card interest rates in check is to pay off the balance each month. If you have a zero balance, then those high interest rates won’t eat up your paycheck. Paying off the card on a monthly basis can be a tough situation. If you can’t pay it off, then only use the card for absolute necessities.

Regarding monthly payment on your traditional credit card, always make sure it is paid on time. Besides a negative mark on your credit rating for late payments, credit card companies charge extra fees for a late payment and over the limit to name a few. Read all the rules to make sure you’re familiar with charges. Then check your bill each month for accuracy.

The use of credit cards benefit consumers in many ways. But, misusing a credit card can cause problems. Use common sense and try not to spend more than you can afford.

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2 months ago

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