It happens every month: The credit card bill is due.
You dutifully send your minimum payment on the due date but watch the balance grow ever larger.
But what if you could pay half that amount every two weeks instead of one payment every month?
More payments, you say?
Thanks, Ill pass.
But what if the new payment schedule could save you hundreds of dollars?
Biweekly payments are a simple way to reduce your balance and the amount you pay in interest.
Heres what you gotta know.
How Do Biweekly Payments Work?
You may have already heard of or received offers for biweekly payment plans for debts like your mortgage.
Heres how one works:
No Interest Til Almost 2027?
Balance Transfer = Credit Card Cheat Code
Lets say your monthly payment for a debt is $500.
If you make biweekly payments, you pay $250 every two weeks.
An amortization schedule is a table listing regular payments for the life of a loan.
Each amount includes a little more toward principal and a little less toward interest as your balance goes down.
Did you know?
That starts with knowing how much interest youre being charged on a debt.
Before starting a biweekly payment plan, review loan contracts to be sure it doesnt include a prepayment penalty.
That allows you to pay down the debt faster and avoid paying extra in interest.
Whenever we come across credit cards, to me, thats a no brainer, Walsh said.
People should be setting up biweekly and more frequent payments when it comes to a credit card.
Not so fast, say the experts.
Ball, a certified financial planner with Ball Comprehensive Planning in West Linn, Oregon.
It is also interesting to note that most people do not live in their home that long.
The typical buyer could be expected to stay in a single-family home roughly 12 years before moving out.
Typically, pre-paying the mortgage yields a lower probability of retirement success than other options.
Should You DIY Biweekly Payments?
So youve weighed the pros and cons, and youre ready to put yourself on a biweekly payment plan.
Those fees can end up being pretty high and may outweigh the benefits of those extra payments.
Your best option for paying down debt on your terms and without the fees?
Hint: Look in the mirror.
What we see a lot of times is this has to be a DIY approach, Walsh said.
But the good news is its not that hard to implement.
Divide that amount by 2.
Schedule automatic payments from your checking account for every two weeks.
Most lenders dont make it super easy.
Paying biweekly isnt a quick-fix solution for all your debt.
Tiffany Wendeln Connors is a staff writer at The Penny Hoarder.
Readher bio and other work here, then catch her on Twitter @TiffanyWendeln.
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