How to Pay a Bit More Than the Minimum Amount on Credit Cards

Credit cards are flexible, allowing you to make large purchases and pay them off immediately or stretch repayment over months or even years. Card issuers require a minimum monthly payment, but sending more money is optional. More than half of American credit card users carry a monthly balance and 29 percent only pay the minimum amount required at least some of the time, according to the 2009 "Financial Capability in the United States" study, conducted by the FINRA Investor Education Foundation. Your balance goes down faster and you save on interest if you add money to that minimum.

Instructions

1

Change your income tax withholding amount if you usually get a refund from the federal government, Melody Warnick, an MSN Money website writer, advises. A refund means you are paying too much and the government simply holds on to the money until you file your tax returns. Put it to use immediately by adding it to your credit card payments once you adjust your withholding to an accurate level.

2

Cut unnecessary expenses out of your budget and add the money to your credit card payments. Warnick recommends monitoring your spending for a week by writing down every expense. Note the optional items, like buying vending machine snacks, going to the movies or going out to lunch. Eliminate as many as possible to free up extra funds.

3

Find the interest rate on each of your credit cards and channel a bit more money to the ones with the highest rates. The Credit CARD Act, a federal law, makes card issuers tell you how long it will take to pay off your accounts if you only send the minimum, according to the Bank of America website. Statements must also show how much you would pay in interest charges over that period. Use this information to decide how to allocate your funds for extra payments.

4

Hide all but one credit card and use that remaining account sparingly, Warnick recommends in her MSN article. Your minimum payments go up if you keep spending more money on your cards, making it harder to send extra funds.