Many people are tempted to only pay a measly one fifth a month off their credit cards mainly because it just sounds very cheap. But most of them don’t realize that paying off only a little every month is a dangerous thing to do as it may leave you in debt for almost your whole life! The lenders mathematically designed the credit card monthly minimum payments to keep you in debt and make more profit off you by charging you interest after interest of every month that you stay in debt.
Your aim should be to pay off your debt as quickly as possible so you can stop earning your lenders money from interest. The monthly minimum repayment is a percentage of your outstanding credit card balance. So as you decrease your debt, you also decrease your monthly minimum repayment.
Most of the reason why people only make the minimum payment is simply because they don’t understand how damaging this is. Use this calculator to check how long it will take to pay off your debt, and how much interest you will pay over the life of your debt if you only make minimum monthly payments.
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