Your credit card statement arrives in the mail, and you do what almost everybody does: you open the envelope and see what you owe this month, then put it aside with the other bills, tossing it on the pile until you’re ready to deal with the burden.

Too few of us check the statement for the charges to make sure they’re accurate, look at the interest charges on the balance we’re carrying forward, or calculate how much we’d save if we paid more than the minimum.

Those who manage their credit card payments by comparing one statement against their other credit card bills to carefully budget how much to pay on each one, each month, are on their way to financial security. But how much is enough?

The answer, and all of these good practices, can not only save money but also preserve a good credit score. So how do you avoid the common mistakes people make when paying their credit card bills?

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Pay More Than the Minimum

The convenience of paying merely the suggested minimum payment, an amount which is usually far less than the entire balance you owe, allows you to avoid late payment fees and stay in good standing with your credit card company. You would think that looks pretty good on your credit report, too.

But paying just the minimum is a trap that will give you maximum pain in the form of interest added to your existing balance. And as your credit card bill grows larger each month from that added interest, your overall debt level grows even when you think you’re doing what it takes to pay it down.

Check Your Transactions

That minute or two it takes to review the charges on your credit card statement each month could can save you big time. Like everyone, the companies that track your transactions make mistakes, and fraud is rampant these days.

In addition, most card issuers now have smartphone apps, which can be set up to provide instant transaction alerts.

Ultimately, catching the charges that aren’t yours is your responsibility. If you find something amiss, even if you’re just unsure, report it immediately. Otherwise, you’ll be on the hook.

Inspect Those Interest Charges

Overlooking interest charges is one of the most common mistakes people make in managing their credit card payments.

If you’re in the habit of dividing your budget to pay an equal amount on each card, you’re making a costly miscalculation. Instead, try to repay the card with the highest interest charge first.

If paying down the highest balance is your priority, think again. Your credit cards with the highest balance aren’t necessarily the cards charging you the highest interest. Check your interest rates first, and make paying down that debt the priority. The same is true for those who pay off their credit cards according to the lowest balance first, with the aim of getting the balance to zero in hopes that will improve your credit score.

A better plan is making a payment that reduces the balance on the card charging the highest interest rate first. If you’re playing a balancing act of splitting the budget you’ve set aside for credit card bills, you may want to quit that game immediately.

The Best Way to Manage Payments

Focus on reducing the chunk of money that goes directly toward interest — without forgetting to make some kind of payment on the other cards. Pay at least the minimum on every card, more if you can afford it, but never lose sight of the account charging you the highest interest rate. Reducing that balance will cut your debt and that will give you a better shot at improving your credit score.


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