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Take charge of your credit card by being a deadbeat

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Take charge of your credit card by being a deadbeat

Believe it or not, sometimes it’s good to be considered a “deadbeat.” Some in the credit card industry use the term “deadbeat” to refer to consumers who pay off their balances in full each month.

Why would companies prefer to have customers that don’t pay their bills promptly? It’s quite simple: profits. One of the ways that credit card companies make money is by charging interest and late fees. Those deadbeats are not always as profitable as others.

What does this mean to you? If you can adopt a deadbeat approach to your credit cards, you can enjoy paying less interest and fewer penalties. In addition, by being a deadbeat, you may be able to slowly get ahead.

Assess your credit card situation

The first step toward becoming a credit card deadbeat is to look at your current credit card balances and assess the situation. If you only have one credit card with a small balance – terrific.

However, with average household credit card debt rising in recent years, chances are that you may have some work to do to get that overall balance down.

Consider your credit card use

Is it reasonable to consider using your credit card less often? This means adopting another approach: If you don’t have the cash available, ask yourself the tough questions. Is it necessary? Can it wait?

Look at the terms of your credit cards and determine which card is the best to use for daily purchases. Be aware of the different interest rates associated with different cards, and even different balances.

Pay down balances
Next, start paying down your balances. Concentrate on the card with the highest interest rate first and consider transferring your balances to the card with the lowest rate.

Your goal is to be a deadbeat, not a “revolver” (those who carry a balance each month and thus pay interest charges and/or other fees).

Being a credit card deadbeat

Assuming you have your credit cards at a fairly manageable amount, chances are that you’re close to being a deadbeat. Look at your budget and decide how much you can afford to pay each month for discretionary items.

By reducing your reliance on credit cards, living within your means, and paying your balance in full each month, you’ll soon find that being a deadbeat may not be so bad after all.



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