The best way to lower the cost of your credit cards is to pay your balances on time and in full every month. When you make full, on-time payments, you avoid paying interest charges and late fees, and your credit score stays healthy, allowing access to other opportunities with lenders, like home loans and other big purchases.
But if you’re carrying balances on your cards, here are several things you can do to get your cards under control.
Get smart about your card balances and APRs
Whenever you use your cards, or if you’re thinking about a new one, be mindful of your current balances and the interest you’re paying. When you think about how much interest will add to your cost, you can avoid impulse buys and help guide purchase decisions in general.
It’s a tough first step: use your cards less, so you carry a lower balance. But the more you lower cards’ balances, the less interest you’ll pay month after month.
Bright helps you stay on top of your balances and APRs. On the Bright app, you can see everything in one place. No need to jump between different bank and credit card apps. And Bright guides you, automatically, on which card to pay off first, telling you how much to pay and then making the payments for you.
Avoid getting stung by late fees
Card issuers typically charge outrageous fees whenever you submit a payment after its due date. Most require a minimum payment, and some can be confusing about grace periods and posting dates.
It’s a big deal: every late payment impacts your credit score. But it’s also hard, especially if you have multiple cards and some have different due dates. Monthly reminders, calendars and spreadsheets can help. But making payments is still on your shoulders.
Bright makes sure you never pay another late fee. We automatically make payments ahead of their due date. And we make sure it’s the right amount, that’s smart for you, learning what you can afford and which cards are costing you the most in interest.
Use your monthly "surplus" wisely
Your surplus is how much cash you typically have on hand at the end of each month, after you’ve paid off essential and major expenses. Ideally, your credit card payments are part of that monthly tally, too.
Once you’ve calculated your surplus, consider committing more to paying off your cards. The sooner you lower your balances, the less interest charges you’ll pay. Paying more than the minimum due can bring real savings.
Bright is built to make smarter payment decisions. Once your bank accounts and cards are connected to Bright, we’ll learn about your spending habits and automatically make your card payments, tailored to how much you can afford and which cards are costing you the most money every month.
Set goals to pay off balances
Setting a monthly goal can help focus your payments and save you money. Commit to a regular amount, over and above the minimum payment due. The more you pay off, even in small, regular payments, the less you’ll pay in interest charges.
Even a small goal is a step in the right direction. Small payments made regularly can really help, lower the amount you’re paying in interest.
With Bright, you can set monthly goals and let Bright handle the rest, making the right payment at the right time, keeping you on track.
4 ways to pay off credit cards.
Contribute to your goal regularly
The best way to reach your pay-off goal is to do it regularly and consistently. Set reminders or use a calendar to make sure you’re paying your goal amount, not just the minimum due.
Bright can handle this for you, automatically making payments at goal levels set by you. It’s a worry-free way to make sure you stay on track.
Choose the right method for paying off balances
How do you decide which card to pay off first? Which balance should get the largest payment? The right method can help allocate your payments at a pace that makes sense for you.
The Snowball method targets cards with low balances to ensure they get fully paid first.
The Avalanche method targets higher APR cards to ensure you reduce interest costs as fast as possible.
Both methods have their benefits, and both require hard work month after month.
Bright can handle this automatically, finding the fastest, smartest way to allocate your payments, ensuring you’re always paying less in interest fees.
Optimize your credit card utilization
If you have multiple credit cards, use them all with moderation. Don’t use one too much -- spread your expenses across multiple cards. By spreading your debt, you’re more likely to stay within 30% utilization of your available credit
Bright can help by targeting your most expensive card -- the one that’s charging your most interest. As you spread your debt to below 30% on each card, try to avoid using the target at all.
The best way to lower the cost of your credit cards is to pay your balances on time and in full every month. When you make full, on-time payments, you avoid paying interest charges and late fees, and your credit score stays healthy, allowing access to other opportunities with lenders, like home loans and other big purchases. But if you’re carrying balances on your cards, here are several things you can do to get your cards under control.
Keep using Bright
Bright can help by targeting your most expensive card -- the one that’s charging your most interest. As you spread your debt to below 30% on each card, try to avoid using the target at all.
Your Bright Plan always finds the fastest, smartest way to pay off your cards -- automatically. Bright learns about your spending habits and figures out how much you can afford and the best time to pay it. So you never pay another late fee, and you pay less in interest charges too.
