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Now is the time to pay down costly credit card debt

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Can you pay off your credit card in full this month?

Jan. 8, 2019

If there ever was a year to make paying down your credit card bills a New Year's resolution, this is it.

Credit card interest rates are at record-high levels right now. The national average is currently 17.6 percent, according to Bankrate.com, and financial experts expect rates to continue going up this year.

To make a dent in that costly balance, you'll need to make more than the minimum payments.

Paying the minimum either "keeps you running in place or sends you backwards," said Bruce McClary, vice president for communications at the National Foundation for Credit Counseling. If you're still using the card to make charges and only paying the minimum, that balance will grow, dragging you even deeper into debt.

You should also resolve to pay on time, all the time. Pay late and you'll not only get hit with needless penalty fees, but your credit score will also take a beating. That can limit your ability to get a loan or rent an apartment, make it harder to get wireless phone service, and it could drive up the cost of insurance.

Payment history is the most important factor used to determine credit scores. A single late payment of 30 days or more can cause your score to drop by 100 points or more. And it could take years to erase the damage.

If you can't pay off the balance in full, at least make the minimum payment that month. It's much better than paying late. If the problem is remembering to pay, set up automatic payments or payment reminders.

More Info: 7 resolutions to improve your financial well-being in 2019

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