While it might appear to be a good deal to pay only the minimum amount due on your credit card's outstanding balance each month and keep the extra cash for other bills, this could be one of the worst financial moves you can make. Why? It will take you a very long time to pay off the balance, and the interest costs (often quite high on credit cards) can be shocking. Example: If you pay only the minimum due, a $500 television would cost you more than $900 (including interest costs) and require eight years of payments.
So pay as much as you can on your charge card each month — pay the entire balance, if possible — to avoid interest charges. If all you can afford is the minimum amount, pay that... and pay it on time to avoid a late fee and other potential problems.
While it takes discipline to pay most or all of your credit card bill each month, the sooner you pay off your balance, the less you pay in interest and the more you have available to save for a home, college education, retirement, or something else that truly benefits you.
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While it might appear to be a good deal to pay only the minimum amount due on your credit card's outstanding balance each month and keep the extra cash for other bills, this could be one of the worst financial moves you can make. Why? It will take you a very long time to pay off the balance, and the interest costs (often quite high on credit cards) can be shocking. Example: If you pay only the minimum due, a $500 television would cost you more than $900 (including interest costs) and require eight years of payments.
So pay as much as you can on your charge card each month — pay the entire balance, if possible — to avoid interest charges. If all you can afford is the minimum amount, pay that... and pay it on time to avoid a late fee and other potential problems.
While it takes discipline to pay most or all of your credit card bill each month, the sooner you pay off your balance, the less you pay in interest and the more you have available to save for a home, college education, retirement, or something else that truly benefits you.