Buck Builder #3 – Pay Off Your Credit Card Before You See a Statement
Credit cards are a problem for a lot of people and it’s because they’re easy. Easy to spend money with. Easy to ignore. Easy to just pay the minimums. Easy, easy, easy. But if we’re going to retire well and hopefully early we need to curb our habits. So, here’s the challenge, which will be simple for some and very difficult for others. Pay off your credit card every time you get your paycheck.
Every paycheck, log onto your banking app, then pay off the whole balance. And not the balance owing, but what your credit level is less the available credit. It sometimes take a few days for everything to register in your balance owing so for example if you had the following:
- Credit limit: $2,000
- Available Credit: $1,500
- Balance Owing: $100
you have $100 owing, but you’ve actually made ($2,000 credit – $1,500 available credit) $500 in purchases. So put $500 from your paycheck onto the credit card. This has the benefit of having less money in your account so you’ll hopefully spend less in the future and it becomes a habit ensuring you’ll never allow the dreaded credit card interest rate to take a handful of your hard earned dollars.
If you’re new, check out the Buck Builder Program. It’s a simple way to get a picture of where you stand and get you started in the right direction. Check it out here. And don’t forget to sign up to the newsletter to get our Buck Builder Challenges and weekly blog posts.