| We often think of using a credit card as a | | | | 16 months to pay off and the total cost of the |
| convenient way to make purchases. What we | | | | purchase will be $1,119 - saving you almost $400! |
| sometimes forget is that credit cards are LOANS. | | | | Avoid accumulating more debt. If you make only |
| Have you ever wondered why it takes you so | | | | minimum payments and you continue using your |
| long to get out of credit card debt when you are | | | | credit card, you will accumulate debt, which can |
| making the minimum payments on your credit | | | | negatively impact your ability to pay off the debt |
| card each month? Credit card companies keep | | | | in full. If you start off with a good repayment |
| the minimum payments low because their main | | | | discipline and pay more than the minimum |
| income stems from the interest you pay. The | | | | payment, you can avoid accumulating too much |
| longer you wait to pay the balance outstanding, | | | | costly debt. |
| the higher the interest payments that you end up | | | | Improve your credit score. Consistently paying |
| paying to the credit card company to repay your | | | | more than the minimum amount will positively |
| debt. | | | | influence your credit score, as you debt will be |
| Paying more than the minimum payment on your | | | | repaid sooner and the risk of default decreases. |
| credit card is preferable for the following reasons: | | | | Of course, the best way to save money and |
| Get out of debt sooner. Pay more than your | | | | avoid paying interest charges is to pay off your |
| monthly minimum to stop your debt form | | | | balance in full when you first get your bill. When it |
| accumulating and becoming increasingly expensive. | | | | comes to credit card payments, try to stick to |
| The faster you can get out of debt the less it will | | | | the principle of "what you can do today, do not |
| cost you. | | | | postpone to tomorrow" - because paying less |
| Avoid paying more interest. If each month you | | | | today will add to your cost tomorrow. |
| can pay more than the minimum payment, you | | | | TIP: Go for higher minimum payments! If you |
| will limit interest costs. For example, imagine you | | | | tend to pay only the minimum each month, the |
| buy a computer for $1000 with your credit card | | | | lower your required payment, the longer it will |
| at an annual interest rate of 18%. If you make | | | | take you to pay off your debt, and the more |
| only minimum payments, it will take you 7 years | | | | expensive that debt will be. And, if you pay off |
| to pay off and the total cost of the purchase will | | | | your credit card balance completely and on time |
| be $1,516. If you pay just $50 more than the | | | | each month, you will not pay interest or fees. |
| minimum payment every month it will take you | | | | |