Debt Payment Dos and Don'ts

Alexandra Heep By Alexandra Heep, 29th Aug 2010 | Follow this author | RSS Feed
Posted in Wikinut>Money>Debt

Some things you need to know when it comes to making payments to creditors

Understanding Debt

Unfortunately debt seems to have become a way of life in the "civilized" world. Debt is usually advertised as a way to build credit, or a way to save money. What does that mean? Just think of how hard it is to buy a car, a home, or even just a simple piece of furniture if you have never borrowed money with interest, in other words: incurred debt.

Think of all the times sales clerks try to push you to get one of their stores' credit cards. If you politely decline, you usually get told something along the lines of: "But, you can save 10 percent on today's purchase!"

In order to understand debt payment dos and don'ts, you have to understand the concept of debt first. No matter how society dresses it up, debt is incurred when we buy something that we could not otherwise afford.

While it makes sense on a car or home (you need a car to earn money usually, and a home is one of the more sensible investments), one should really try to stay away from other types of debts, like credit cards. When buying items like furniture or jewelry, evaluate how much furniture or jewelry you really need.

If you must carry around debt, some of the dos are:

Make Payments on Time

A lot of creditors will report even one day late payments as 30 days late on your credit report. This applies to credit cards, as well as installment loans. If the point of obtaining credit is to build a credit history, you will only hurt yourself if you are late, and you are working against your goal by lowering your credit score, which in turn will mean higher interest rates for home purchases etc.

Know your Accounts

Know the details for each of your accounts. That means that you need to know how fast a payment will post, and how you can make the payments (in person, phone, Internet). Creditors have different polices - know them inside and out.

Pay More Than The Minimum

When paying on a credit card, always pay more than the minimum. You will never get it paid off if you just pay the minimum. That is why finance charges work and banks get rich.


Don't use your credit card right after you make a payment. The finance charges will be assessed on the higher balance, as if you never made the payment at all.

Don't wait until the last minute to make a payment. This goes for installment loans, mortgages and credit cards. Yes, you can make those "convenient" payments by phone or on-line, but a lot of times there is an extra charge to do so.

Final Thought

A lot of people already seem to know these things, yet they are afraid to think about debt too hard for fear of the consequences and rather stick with their old habits. It is hard to change your ways, but you owe it to yourself.

If you incur debt, never max yourself out. Plan for the unforeseen and resist buying more than you can afford just because somebody else has it. When you do incur debt, follow the dos and don'ts and you will be ahead of the Joneses.


Budget, Credit, Credit Card, Credit Cards, Credit Report, Debt, Debts, Finance, Finances, Money, Money Managment, Money Tip, Payment, Payments

Meet the author

author avatar Alexandra Heep
I am a freelancer and I can write about any subject. I have a professional background in administration, real estate, marketing, and mortgage post-closing. Other areas of expertise include health and beauty as well as spirituality and self help iss...(more)

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author avatar constance
14th May 2012 (#)

I have paid of one credit card, now i got to work on the other it's Capitol One, I'll never charge up again! it's hard paying credit cards off. Great Article!

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