By making one simple change, you can use the same amount of money to pay off your credit card faster.

All you have to do is not wait around for the credit card company to send you a bill and make your payments earlier.

If you’re carrying a balance that you’re trying to pay down, every day the interest is compounding. The take what you owed yesterday, then calculate interest and add it. The next day, they take that higher number and calculate interest on it and add it on too, growing and growing every day.

So if you can make payments early, you reduce the balance and the interest that gets added on will be less. Red Tape Chronicles gives this example: “Two consumers with a $2,000 balance and a 29 percent interest rate make a $3,000 purchase during the month. One buys on the 5th, the other on the 27th. The first consumer pays $113.62 in interest; the second about half that: $61.18.”

No Credit Needed has a spreadsheet you can download so you can play around and see how making different payment schedules will affect the total amount you end up paying.

A lot of people get paid bi-weekly, so instead of making one payment at the end of the month, you could make a payment with each paycheck. Or make a payment every time you find a quarter on the street. Or you get grandma-money in the mail. Every little early bit helps. (Then, once you’re totally paid off, avoid charging more than you can pay off in a single month so you don’t end up paying interest again.)

How to save money on: Credit card bills [Red Tape Chronicles] (Photo: Joe Lanman)

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