What happens if you only make the minimum payment on your credit card statement?
Question: What happens if you only make the minimum payment on your credit card statement?
If you only make the minimum payment on your credit card statement, you will end up paying much more in interest charges and it will take you much longer to pay off your balance. Here are some potential consequences of only making the minimum payment:
Increased Interest Charges: Credit card companies charge interest on the balance that you carry over each month. If you only make the minimum payment, the remaining balance will continue to accrue interest, and you will end up paying much more in interest charges over time.
Long Repayment Period: Making only the minimum payment means it will take you much longer to pay off your credit card balance. This is because the majority of your payment will go towards paying off interest rather than the principal balance.
Negative Impact on Credit Score: If you consistently make only the minimum payment, your credit score may be negatively impacted as it can indicate that you're struggling to keep up with your debt.
Risk of Penalties: If you miss even one minimum payment, you may be hit with a penalty fee or a higher interest rate. This can make it even more difficult to pay off your credit card balance.
In short, only making the minimum payment on your credit card statement is not a wise financial decision. It's best to pay off your balance in full each month to avoid accruing excessive interest charges and potentially damaging your credit score.
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