This is probably the one that first came to mind when I first started talking about eliminating bills, but over the course of the month I’ve talked about pretty much everything but credit cards. That’s because credit cards are actually a necessity. It is actually a fine balancing act because if you don’t have self-control, you can end up in serious financial trouble. On the other hand, the best way to build and maintain a great credit score is to keep a balance on one or two credit cards. It shows that you are financially responsible.
However, if you are like I was at one point, and have over 10 different credit cards (all with balances on them), that not only can hurt your credit, it can be a serious financial burden. Whether or not it is part of your goals for the year, one of the best things you can do for yourself financially is to keep a balance on just one or two of your cards. This is not only financially better for you; it makes it a lot easier to pay the bills every month.
When I had about a dozen credit cards, I would go online to pay them, and I was good at it. The problem was when a site was down (and it still happens with considerable frequency), I would have to remember to come back to the site to pay the bill later. This meant that at least once every six months one of my credit card bills would be paid late because I rarely remembered to return to the sites. Since I only paid bills around my paychecks, and they were monthly, I usually only paid bills once a month, making it very easy to forget to return to make payments. This meant I would end up paying late fees, and back then credit card companies could also charge you for being over the credit limit (which frequently happened after they added another month of interest and the late fee).
I’ve changed some things, like making payments weekly, but ultimately the best way to manage credit card payments was to have only a couple. Most of the time we pay them off once a month and maintain a balance on one or two of them.
The thing about credit card elimination is you have to plan it, both short-term and long-term. Take the time to evaluate your current cards, determine where your highest interest rates are and get them paid off first. As you pay them off, you increase the odds that you will be able to negotiate a lower interest rate on your other cards, which means you can get them paid off even faster.