How to Handle a Credit Card with a Spending Minimum

Credit Card Spending - Complete Controller

Many people use credit cards regularly, and credit card companies are finding new ways to cash in. Some will offer lower interest rates if you accept their card with a monthly spending minimum. This means they will set a minimum you have to spend to avoid penalties. This guarantees you will have perpetual credit card debt. While overall, it is recommended that you don’t get a credit card with a spending minimum, here are ways you can meet your spending minimum. Check out America's Best Bookkeepers

  • Use your card to pay all, including your utilities. Using your credit card with a spending minimum to pay bills will help you meet the minimums on bills you would already pay each month. Once you have charged these bills, use your paycheck to pay the amount down immediately to avoid interest and deeper debt.
  • Only get one card at a time. If one card has the spending minimum you can handle, don’t get any other cards with a  spending minimum, or you may default on one or more of those requirements and build up fees and penalties.
  • Use your card for rent or car payments, or mortgage.  Because these are the biggest bills people generally have if you can charge these payments to the card, use your paycheck to pay off the balance each month.
  • Use your card to prepay your bills. If you can charge your bills to prepay your bills and get them ahead, this will help you reach your minimum spending requirement. The key to keep your debts down will be to pay the balance as soon as possible to minimize interest and debt.
  • Use your card to pay quarterly taxes or end of year taxes due. Using your credit card to pay your taxes can help get your minimum spending requirement met. The IRS accepts all credit cards and debit cards to make tax payments, and depending on how much you owe, this could quickly meet the requirement.
  • Use your card to pay reimbursable business expenses. Often employees are required to use company credit cards for business purchases. However, if your company allows you to use your card and get reimbursed, use this card to pay your business expenses. Check out America's Best Bookkeepers

When your credit card has a spending minimum requirement, you must pay your bill within the established deadline or risk credit card debt. If you do not, be prepared to pay late or late fees and other financial charges. When you pay your credit card bill, your card issuer must credit the payment to your account the same day you receive it, but there are some exceptions.

The issuer of your credit card can specify requirements for the crediting of payments. For example, your card issuer may set a reasonable time limit to receive your payment and credit it that same day. Still, generally, you can not specify a deadline before 5 p.m. of the expiration date in the place specified by the issuer.

To avoid additional charges, follow the payment instructions of the card issuer. If you send your payment to an incorrect address – even if the issuer receives and accepts payment at another of your offices – the credit to your account could be delayed for up to five days. If you usually send your payments by mail but lose the envelope with the payment address, look up the payment address in your billing statement or call the issuer to ask for the correct address. If you pay your bill online, mark a reminder a week or a few days before your bill’s due date to pay it on time, and be sure to transmit your payment to the correct electronic address. Establish an electronic receipt notice to have a receipt stating that the company received your payment online. Whichever method you use to pay your credit card bill, check your billing statement to ensure you know the due date and place of payment for each account. Check out America's Best Bookkeepers

Automatic debit to your bank account can be a convenient way to pay bills, but you have to consider some factors. For example, the amount to be paid each month may be different, and to pay your bills, you will need to have sufficient funds in your bank account. Otherwise, you could overdraw your bank account. You could be charged for insufficient funds, which could hurt your credit rating. Under federal law, you cannot be required to agree to use automatic debits on your bank account to repay a credit extension.

If you find an error on your bill, you can dispute the charge and withhold payment of that amount while the charge is investigated. The error could be due to a charge for an incorrect amount, for something you did not accept, or for an item that was not delivered as agreed. But you must pay any other part of the invoice that is not in dispute, including financial charges and other charges not related to the amount in dispute.

To dispute a charge, write a letter to the issuer and send it to the address indicated in your account summary for “inquiries or billing inquiries.” Include in your letter your name, address, account number, and a description of the billing error.

Send your letter as soon as possible. Your letter must arrive at the address of the issuer of your credit card before a period of 60 days from the date on which the issuer sent you by mail the first invoice with the error. The card issuer must acknowledge receipt of your complaint in writing within 30 days after receipt of your letter unless the problem has been resolved before. The card issuer must resolve the dispute within two billing cycles or 90 days, whichever is later.

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