Tip 1 of 10: Pay Down Credit Card Balances


National Credit Federation is a credit restoration organization based out of Tampa, Fl.

We've put together this video series to inform consumers on the best ways to improve your credit rating.

The information in "Tip 1 of 10: Pay Down Credit Card Balances" is published on: http://nationalcreditfederation.com/top-10-ways-improve-credit/

The higher your debt-to-income ratio is, the lower your score. And what many people don’t stop to calculate is the full cost of maintaining a credit balance. Running a credit balance translates to interest charges, and American consumers pay nearly $100 billion in interest on credit cards per year.

“Pay down your balances, and keep those balances low,” Pamela Banks, senior policy counsel at Consumers Union, suggested.

For example:

If your credit card has an annual percentage rate of 15 percent, it will have a daily rate of .041096.

Assume a cardholder has a balance of $1,000 at the 15 percent APR standard interest rate. The next day, interest is ...

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