How to Make a One Time Credit Card Payoff
Credit card interest rates tend to be higher than rates on mortgages, car loans or other secured debt. Balances grow quickly when interest compounds monthly and for some people annual fees and late payments add to the balance. Making a one-time payoff on a credit card saves money for the cardholder by preventing interest accrual. After paying off a credit card, the owner benefits from additional cash flow in subsequent months.
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Things You'll Need
- Credit card
- Statement
- Credit card receipts
- Check or Internet bill pay service
- Calculator
- Notepad and pen
Instructions
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Pay Off Your Credit Card
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1
Review your purchase receipts to determine any recent charges on your credit card. Ask friends and family to help you recall any expenses not recorded among the receipts. Write a list of the charges incurred and round up if unsure of exact figures.
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2
Open you most recent credit card statement or sign in to the financial company's website if you receive online statements. Review the charges listed online and use a calculator to add the statement balance to the recent charges made after the statement date. Write down the total and compare it with the available balance shown online. If you do not have online access, call the customer service number on the back of the card and listen to the available balance.
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3
Contact a customer service representative at the credit card company and have them verify the available balance, recent charges and pending charges. Ask the representative to provide details of any impending interest charges, late fees, service fees or annual fees the company plans to assess on the account. Use the calculator to total any additional fees and add the figure to the previous total. Verify the accuracy of the total projected balance with the representative and make any necessary adjustments. Review your other accounts to ensure they contain sufficient funds to cover the credit card balance.
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4
Pay the entire balance including impending charges to the credit card issuer. Online bill payment or telephone payments process quickly so the payoff will leave a zero balance. If mailing a check to pay the balance, beware that interest accruals could occur during the time the check takes to reach the card issuer. To avoid having a residual balance pay a few dollars extra. Credit card company's refund excess payments back to customers after processing occurs.
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Tips & Warnings
When paying off multiple cards, prioritize them and first pay the ones with the highest interest rates and fees.
Ask your credit card company if they assess an annual fee or other miscellaneous charges. Consider closing the paid off card if fees apply.
References
Resources
- Photo Credit bank statment and cut credit card image by Warren Millar from Fotolia.com
