Paying Off Credit Card Bill Early Could Save You Money
By Steven Gibbs
July 22, 2009
We all know that paying off your balance each month can keep you from adding interest charges to your purchases, but did you know that paying your bill early could save you even more. According to an article called "Pay Credit Card Bill Early and Save", this is exactly what one family found out as they paid off their credit card bills earlier in the month.
You see, for those who carry balances from one month to the next there is no grace period, and when this is done credit card issuers charge interest everyday until the amount borrowed in paid. In this situation, the credit cardholder will lose money day by day every time they make a payment around the same time each month. In the long run, your interest is compounded from the first day you make a purchase until you pay off your bill, but if you were to pay off your bill early or little by little each day or week you would save money because there would be little to no compounded interest.
As many cardholders have had their interest rate raised recently, this could be the perfect opportunity to save money to help pay for other things. With this model of paying off your balance early, the higher the interest rate the more money you will save in the long run. In my opinion this is a great article for everyone who owns a credit card, as paying off your bill early will not make you rich but any money saved is better than none, and over the long term it could be well worth it.