Ever feel like you just can’t pay off your debt quick enough? Here are some ways your credit card creditor may be holding you down.

Increasing your credit card interest rates

Do you walk out to your mailbox every month, snatch up your bills and wonder: ‘How am I ever going to be able to pay all this debt off?’ It’s a thought that rushes through the minds on millions of Americans every year as they struggle to try and make payments on debt that seems almost insurmountable. However, it’s important to know that credit companies are in the business of making money and will do just about anything to make money.

Therefore, you should be careful for several things, the most important being the use of interest rates on credit cards and most other forms of credit. Interest rates are actually quite easy to understand but many people lose track of exactly what their interest rate is and eventually succumb to an overwhelming rate.

Most creditors will start your interest rate off low, even as low as zero percent. At that rate, you can use your credit however you please and the creditor doesn’t see a dime. After a certain predetermined amount of time, though, the interest rate balloons and consumers are required to start paying the creditors every month just for carrying a balance.

Before you take any form of credit, find out how the interest rate works, what it will be and if it will be fixed and vary over the course of a year. Once you understand how this works, you’ll be able to avoid paying unnecessary fees just for using credit.

Understating the importance of minimum monthly payments

Minimum monthly payments are another way that different creditors get you
to pay more on your credit cards. In theory, the minimum monthly payment is a set amount that allows you to pay off the creditor—not usually the balance—every month.

Most people believe that when they pay the minimum monthly amount, they’re paying the lowest amount the credit card company needs that month. But in reality, they’re usually paying off the amount the credit card company needs to make in order to turn a profit off your account. In many cases, you won’t even be lowering your overall balance at all as the credit card company’s interest rate will come right behind your minimum monthly payment and boost your balance up again.

It’s important to be mindful of this and do what you can to make payments above and beyond the minimum payment required. This is the only way you’ll be able to pay down your debt and limit the amount of money you throw towards your creditors at the same time.

Overcharging you for late credit card payments

Like minimum monthly payments, the penalty you are charged for making a credit card payment late makes sense. After all, how will your credit card company make any money if all the customers it lends money to simply don’t decide to make payments on time? However, many credit card companies overcharge you for making late payments, which makes it even more important for you to make all payments promptly and on time.

In addition to the fees you already accumulate with your interest rate, late penalties are one fee that simply doesn’t make sense. It’s a way for creditors to force you to make payments on time and charge you heavily if you don’t. If you’re not already careful about not skipping payments, consider creating a system using a calendar that ensures that you don’t miss monthly payments. You’ll be glad you did and you’ll be a whole lot less frustrated by your creditors.