Credit Card Quick

The Advantages of Bi-Monthly Credit Card Payments

Introduction

We all know that a good credit score is highly important in today’s economy. It is therefore all the more important that we do what we can to maintain a great credit score. For some individuals, this may mean making bi-monthly credit card payments instead of monthly ones.

Making bi-monthly credit card payments (paying on your credit card twice a month, instead of once a month) may make the task of paying on your credit card a more easily manageable one. Smaller payments, for some individuals, are just easier to budget, and may allow them to pay more on their credit card than if they were paying once a month.

Why it may pay to make bi-monthly credit card payments –

• You can time your payments with your paycheck –  If you are paid every two weeks then a bi-monthly credit card payment plan may work out well for you. For individuals living paycheck to paycheck, paying on their credit cards, a little bit at each paycheck, allows them to better manage their money and get their credit cards paid each month.
• Paying bi-monthly may allow you to pay down your debt more quickly. For example, paying bi-monthly will allow you to make 26 smaller payments each year – or 13 payments instead of 12 – thereby allowing you to pay down your debt more quickly. You’d be surprised to find what one more payment can do to your balance!
• Bi-monthly payments may help you achieve a sense of satisfaction and gratification. Bi-monthly payments are just as much about your feelings as they are about your financial well being. In other words, you may end up feeling much more in control of your finances by paying bi-monthly, and you may end up feeling more accomplished and gratified.

For many individuals, bi-monthly payments simply help them achieve their financial goals, and allow them to better budge themselves, based on their bi-monthly paychecks.  In the end, achieving a balance with your credit card debt will help you tackle your debts and make them all the more easy to pay off.

Give bi-monthly payments a try – your FICO score will thank you for it!

Credit card Insurance – The Basics

Card Security

Nearly every credit card holder has been asked to take out additional credit insurance. Most of us simply decline this insurance, but is it really in our best interest not to carry insurance with our credit cards?

Although credit insurance varies between credit card companies, the majority of credit insurance plans involve protecting you and your credit in case of unemployment, disability or death. The credit card company essentially continues to pay your credit card bill every month until you are able to start paying again.

If you lose your job tomorrow, or become disabled, will you have the money to continue paying your credit card? If not, you can quickly fall behind on your credit card payments and just as quickly ruin your credit. Are you willing to take that chance?

In addition, if you die tomorrow, will your spouse have the funds to pay off your credit card debt? The last thing many of us want to do is leave our loved ones the responsibility of paying for our debts.

The credit insurance offered by many credit card companies is usually referred to as credit life insurance, credit property insurance, credit disability insurance and involuntary unemployment credit insurance.

Credit life insurance – This consists of life insurance that is designed to pay off your credit card balance in the event of your death. The lender is the beneficiary of your policy; in other words, the life insurance policy is automatically paid to the credit card company. Some credit life insurance policies have a fixed value, while others will not.

Credit disability insurance  – Another popular option which is often sold with credit life insurance, is designed to pay your monthly credit card payments for a fixed period of time and while you continue to prove your medical disability. It is important to remember, however, that most credit disability insurance policies will not pay your bill forever and will not pay off the balance of your credit card.

Involuntary unemployment credit insurance – Similar to disability insurance, as the credit card company pays your minimum credit card payment every month until either (a) you become employed once again, or (b) the policy ends. Just like disability credit insurance, involuntary unemployment credit insurance has a fixed time frame.

Credit property insurance - This  is a bit different than other types of credit card insurance, as it is designed to pay off your credit card debt for items that were destroyed in certain situations, such as a fire or earthquake. For example, if you purchased a new, flat screen television on your credit card and it was then destroyed during a fire, your credit property insurance policy would pay off that debt.

For most credit card holders, it makes sense to purchase credit card insurance, unless of course the costs outweigh the benefits. For example, many consumers already hold life insurance policies that would cover their credit card debt, and some consumers already have disability policies that would cover their living expenses while disabled.

If you are considering credit life insurance, remember to read the terms and conditions of the policy carefully and to weigh both the advantages and disadvantages of the policy before committing to any type of insurance policy.