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Many people get into credit card debt not because of a single big purchase, but because of many smaller ones. Whether it's too many restaurant meals or too many extra purchases tossed into the shopping cart each week, small amounts quickly add up.If you're smart, you can use that same principle to work for you, not against you. Instead of making a single credit card payment each month, you can spread the bill out over several smaller (and less painful) payments.
Multiple payment advantages
Multiple payments can:
Melissa Gullickson has paid off three of her five credit cards in the past year by paying at least the minimum payment twice a month. She times the payments with her paychecks and makes additional payments when she gets a windfall, like this year's stimulus check.
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Gullickson says the double (and triple) payments help her even out her cash flow and give her a real sense of headway. "Paying twice the minimum really helps make actual progress on the balance," she says. "Just paying $50 a month on a $2,000 [debt] gets you nowhere."
Some people get even more ambitious about frequent payments, putting a few dollars toward their debt every few days. The tactic offers immediate gratification for those who need more incentive to dig out of debt. If you resist buying the latest DVD or pair of shoes while you're at the mall, you can put the money you saved toward your debt the same day.
While the major credit card issuers are all fairly flexible about making such payments, check the chart below before you consider this tactic to tackle your debt. Several companies limit the number of online payments you can make each month.
|Name of issuer||Allows multiple monthly online payments?||Limitations, terms and conditions|
|American Express||Yes||Online payments can be made once every 24 hours.|
|Bank of America||Yes||No limitations. There are no fees for Web payments, regardless of how many payments are made each month|
|Capital One||Yes||Customers can make one online payment per day for each credit card account, and customers can have one online pending (not-yet-processed) payment per credit card at any given time.|
|Citi||Yes||Customers can make an unlimited number of payments, but the maximum payment can't exceed $10,000 (or $50,000 for Citigold customers).
|Discover||Yes||Payments can be made every three days.|
|HSBC Bank||Yes||No limitations; however, users cannot make two payments of the same amount on the same day, to prevent duplications.Can't preschedule payments more than a year in advance.|
|JP Morgan Chase||Yes||No two online payments can be within three days of each other.|
|US Bancorp||Yes||No limitations. There are no fees for Web payments, regardless of how many payments are made each month.|
|Wells Fargo||Yes||No limitations. There are no fees for Web payments, regardless of how many payments are made each month (there are limits, however, if the payment is made by transferring money from another Wells Fargo account).|
Data gathered in August 2009. To report an error or an update, e-mail Editors@CreditCards.com.