Credit card balances can get out of control VERY easily. Obviously you have to make your payments on time – but you're not only making the minimum payment, right?
When a credit card user makes only minimum payments, they avoid late fees, which is great. But in the long run, it doesn't actually help! Minimum payments are just that – they do the bare minimum to keep your account in good standing. And that’s a problem.
When you only pay the minimum, you still carry your balance over to the next month. And if you don’t pay off the whole balance, you’re going to pay interest – which makes your balance grow.
This can make it VERY hard to eventually get out of debt – and could even hurt your credit score.
If you're struggling financially, then making the minimum payment is better than nothing. But budgeting to pay down your whole balance is essential and will actually save you more in the long run.
Bad credit has the power to follow us for years, and so do high balances if we don't know how to take care of them. Making the minimum payment is the least you can do – but DON’T get in the habit. Pay ALL of your credit card balance off as soon as you can!