Don�t Pay Only the Monthly Minimum on Your Credit Card-Part One
You may think that when you pay on time the minimum amount due on your credit card at the end of each month, you�re being financially responsible. Think again.
True, paying the minimum on time will keep you from being hit with late fees or suffering a blow to your credit rating. But that�s not the whole story.
True, paying the minimum on time will keep you from being hit with late fees or suffering a blow to your credit rating. But that�s not the whole story.
The long repayment period
Consider the following: If your credit card�s outstanding balance is $926.53 and the interest rate is 19.9% -- a widespread rate these days � then paying only the minimum required each month means it will be eight years and two months before you�ve paid off the full amount.
If your credit card�s outstanding balance is $4,797.36 and the interest rate is still 19.9%, then paying only the minimum required each month will mean it will be 42 years and one month before you�ve paid off the full amount.
It�s not just that you�ll be repaying what you borrowed on the credit for as far as you can see into the future: it�s that you�ll be paying a huge and unnecessary amount of interest in addition to repaying the original sum.
In part 2 of this series we�ll cover unnecessary interest expense and how your minimum payment is applied.
Till then for more valuable financial advice, please visit us at prudentfinancialservices.net
Baca Halaman Selanjutnya