Don't Wait Until January to Make These Credit Card Resolutions. Get Started Now

It's very common for people to make New Year's resolutions that aim to improve some aspects of their financial life. But while a new year is a good time to start working toward goals that will leave you with a bigger checking account balance, you don't have to wait until January to start working on improving your situation with regards to your credit cards. 

In fact, with the average credit card interest rate hitting 21.19% as of August 2023, you can't afford to wait. You should make these three credit card resolutions right now and start working on them today.

1. Resolve to pay more than the minimum

Paying only the minimum on a credit card is not something you should ever do. The minimum payment is usually only around 1% to 2% of the balance due on the card. It will basically cover the interest and very little of the money will go toward reducing the principal balance. As a result, you'll be in credit card debt for decades if you only pay the required amount.

Just how long would you be in debt if you only make a minimum payment? If you owe $1,000 on a card with a 21.19% interest rate, it would take you 245 months to repay your balance, and you'd pay a grand total of $3,973.76 -- including $2,973.76 in interest.

Unless you want to triple the cost of everything you buy and be paying for it 20 years after you made the purchase, resolve to pay more than the minimum required. Ideally, you should resolve to pay your full balance before you owe any interest at all. If that can't happen, then at least to commit to putting a little bit of extra in every payment. Even a small amount can make a big difference, because it goes directly to paying your principal balance.

2. Resolve to make all credit card payments on time

You'll also want to make a resolution to pay your credit card bills on time every single month. This can help you avoid late fees as well as damage to your credit score. People who make a single late payment by 30 days or more could see their credit score fall around 60 to 110 points, with those who previously had great credit seeing the biggest decline.

Keeping this resolution is easy. You can just set up automatic payments from your bank account before your bill is due. Try to make these for as much money as possible -- ideally for the entire balance due on the card -- but aim to at least pay a little more than the minimum no matter what.

3. Resolve to use the right credit card for your situation

Finally, you should resolve to use a credit card that makes sense for you. Specifically:

• If you plan to carry a balance, look for a card offering a 0% promotional APR on purchases or one that charges the lowest rate possible.
• If you won't carry a balance, look for a card offering bonus rewards that are matched to your spending. So, for example, if you spend a lot on gas and groceries, you'd look for a card offering extra cash back for gas and grocery purchases.

You shouldn't go another day using the wrong card, as you could be paying extra interest unnecessarily or missing out on valuable rewards. Research some of the best credit cards to find one that's right for you.

By starting to work on these resolutions today, you can put yourself in a position where you're paying down your debt, improving your credit, and maximizing the value that credit cards can provide you. Why wait until January to do that?