Paying the minimum payments on your credit card is what the credit card companies want you to do. They get more money from interest that way. Pay more than the minimum monthly payments or you’ll pay double or triple of what you owed.

$12,000 credit card debt will take you 400 months (30+ years) to pay off if you make the minimum payments each month. You will pay almost $20,000 in interest. The minimum payment gets lower as you pay off the balance. You’ll end up paying for a long time thanks to compounding interest.

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Today’s open mic question:

I’m in the market for some credit cards. What’s the best credit card(s) to have?

Leave a comment. The commenter’s URL doesn’t have the “nofollow” tag. That means Google juice for everyone!

Here are the rules:

• No spam.
• I reserve the right to delete spammy or trolly comments.
• Comments close at the end of the day (or whenever I feel like it).
• Say anything about anything.

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What does this have to do with paying high debt first? They jumped high and they’re high-fiving. Yeah it’s a stretch but I got nothing else.

Debt with the higher rate charge the most interest per dollar. The way to get out of debt most efficiently is to pay off the debt with the highest balance first. After that, tackle the next highest debt next and so on.

A lot of people will say to attack the lowest balance first but the numbers side with paying off the highest interest debt first. The reason people pay the lowest balance debt first is because one less bill makes them feel less burdened. You lose less money to interest by paying the highest rate debt first.

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Reduce your credit card interest rate in one easy step - call your credit card provider and ask nicely. Just make a phone call saying you’ve gotten some better offers from other credit card companies and you’re going to close your account if your rates aren’t lowered. The majority of the time your credit card company will give in to your demands, simply because the credit card industry has a lot of competition and it’s a whole lot easier to retain an existing customer than to acquire a new one.

So if you want to lower your credit card interest rate, give it a shot. At worst, they’ll refuse and you’ll only lose a few minutes of your time. At best, you could get a major reduction in your interest rate.

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Getting a great rate and the lowest fees on loans and mortgages often requires a FICO credit score of 700+. Walecia (sweet name) posted a tip to help boost your credit score if it’s below 660.

Pay down the cards that are maxed or almost-maxed first. Naturally, lenders are weary when they see credit cards that are maxed or close to being maxed. You get a black mark on your record if you have a balance on your card that’s over 50 percent. For some supplemental reading, check out Flexo’s Raise Your FICO Credit Score.

3 steps to boost your credit score [Bankrate]

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Keep your lines of credit small. Unless it’s for a Bottle Opener Batman Visa Card.

The number of open accounts and lines of credit affects your credit score. There’s no end-all, be-all equation to calculate how much is too few or too many. No calculation will be applicable to all borrowers and all accounts.

A dozen of open accounts and credit lines is looked at differently for a typical working employee compared to an entrepreneur. It’s expected for the self-employed entrepreneur to have more lines of credit than the typical working employee.

Too many open accounts with high balances lowers your credit score (and thus lowers your borrowing power when you need a car loan or a mortgage). Don’t have an absurd number of open accounts and lines of credit and you’ll be golden.

How Many Credit Cards Are Too Many? [American Chronicle]

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Bankrate has a neat calculator that estimates your FICO credit score. You answer 10 questions about your credit history and it spits out a range of what your FICO score would be (give or take 50 points). They ask simple questions such as “What’s the balance on your credit cards?” or “Have you applied for a loan or credit card within the past year?”

I bought my FICO credit report recently and it pegged me with a credit score of 753. Bankrate’s FICO credit score estimator said that my credit score is between 730-780. That’s damn accurate if you ask me. Be honest when you’re answering the questions or the estimation won’t be as accurate.

FICO Score Estimator [via Consumerist via All Financial Matters]

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Canceling any credit card before you apply for a loan is a bad idea. It affects your credit score negatively. A lower credit score will result in higher interest rates and higher fees on your upcoming loan. It doesn’t hurt you for the account to stay open but it can hurt you if you close it.

Do this instead: Pay the credit card off or transfer the balance to another card. If you’re never going to use it again, cut it up or store it somewhere. Don’t cancel it. You can cancel the credit card once you’ve determined that you’re not going to need a loan anytime soon.

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