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Minimum Credit Card Payment

Do Not make Just the Minimum Credit Card Payment

If you only make the minimum payment you are in effect getting a loan from your credit card company.  This is a very very bad idea.

How the minimum Credit Card payment keeps you broke

It doesn’t seem like much money for interest, the first time you just make the minimum payment.  You find yourself $500 or $50 short so you just make the minimum payment. 


Interest and Balance add up Quick

You now lose both the float and the interest free grace period. You are now just like 60% of credit card holders who carry a balance. 


It is so easy to let the balance ride and not get around to paying it down.  If you ever listen to a Dave Ramsey radio broadcast you will hear a ton of people telling stories of how their credit got away from them.  

Carrying just a $500 Balance is Expensive

Here is an Example of carrying a $500 balance on your card.

You carry a $500 balance and you spend $800 per month for gas and groceries on the card every month but pay it down to at least $500. 


So the $800 is spent evenly over the month and you pay within 12 days of the statement. 


You will pay 1.5% on the $500 balance for 30 days and ½ $800 for 30 days. You will aslo pay interest on $800 for the 12 days it takes to get the payment to the credit card company. 


($500*.015)+((800*12)/30)*.015)= $12.30 interest If you made the $812.30 payment you would still a have a $500 balance.  


$12.30 may not seem like much money but it ends up nearly $150 per year.  

And most balances that start off at $500 tend to creep up to $1,000, $2,000 and more.  The easiest thing to do is just always pay off your card in full every month.

Did you pay off your card last month?

If you did not pay off your card last month you will be charged interest on your purchases from the date of the transaction to the date the payment is received. 

Paid in Full is the only way to go

If you paid off in full your card you will get both float until the statement prints and up to a 21 day grace period if you pay it off this month.

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