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Say No To Credit Card Minimum Payment
By William King
Let us face it. Most of us own at least one card if not more. Getting a bill every month is always an agonizing experience because that makes us realize how much we have spent. Often we end up realizing that we didn’t need to spend that kind of amount or worse still, realize that we cannot afford to pay the entire amount due that month. So we end up making the card minimum payment, hoping to clear the balance next month. We repeat this exercise the next month too, and the next month and the next month…till we are caught up in a vicious circle where we pay only card minimum payment. This doesn’t bother many of us since making card minimum payment doesn’t affect our report. We seem to take it in our stride and let the to-be-paid amount to pile up till we have a huge card debt to pay off.

It’s not uncommon to pay card minimum payment. In fact a whooping thirty percent are paying only the card minimum payment. For the first time users card minimum payment means the lowest amount that we can pay to make our account stay in good standing. While card minimum payment helps us to pay our debts without getting a bad report, it somewhere down the line also makes us to take our debt for granted. Opinions are much divided on this issue.

However one thing that stays true is that if you are just paying minimum card payment you are being sucked into a circle of debt and possible bankruptcy! The card minimum payment is calculated as a percentage of your current balance. The card minimum payment drops as your balance is paid, but thanks to the magic of compounding, you'll end up paying for a long, long time. This is something that most people are not aware of and end up paying minimum card payment only. So not only do we keep piling up huge debts to be paid but are unaware of the hidden cost that we also have to pay while paying minimum payment.

Earlier the card minimum payment used to be around 2- 2.5%. However some time ago US government has increased this percentage to 5%. This was because people would make only card minimum payment, thus increasing their debts. To make people pay up their debts faster the government took this step to increase the interest rate. And it seemed to have worked



like a charm! Many people are now shelling out more than merely paying minimum card payment.

It is better to pay off full payment than paying card minimum payment if you wish to save your hard earned money.

Article Source: http://www.articlemap.com

William King is the director of australiawholesalers.com > Australia Wholesalers , Dubai Property & Dubai Real Estate in UAE , and www.zameen.com> Pakistan Real Estate & Pakistan Property Portal . He has 18 years of experience in the marketing and trading industries and has been helping retailers and startups with their product sourcing, promotion, marketing and supply chain requirements.

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