You’ll Pay A LOT of Interest Over MANY Years
Credit card interest charges are determined as a percentage of your outstanding balance. The larger your balance, the greater your interest charge.
By only making minimum payments, the total interest increases each month and your balance snowballs, especially if you continue making charges to the card.
Your Credit Score Will Suffer
The percentage of the credit you are using is known as your ‘credit utilization ratio’. This metric has a major impact on your credit score, which is why keeping a high balance is not a good idea.
The typical suggestion is to use less than 30% of your credit limit per card. But if you’re only making minimum payments, that means you’re using a larger percentage of your allowed credit, which will negatively impact your credit score.
Remember, a poor credit score will make it more difficult to qualify for loans and other credit cards. It can even impact your job prospects and your ability to rent an apartment.
Can’t Afford to Pay More Than Your Monthly Payments? Ask for Help
Paying more than your minimum credit card payment is not only beneficial but critical to your financial health. However, some of us are stuck between a rock and a hard place and simply can’t afford to pay off more of our debt.
Fortunately, there are consumer credit and debt relief solutions offered by companies like Americor. According to the American Fair Credit Council, debt settlement is the most consumer-friendly debt relief option for Americans overwhelmed by debt. Contact a certified debt consultant today to receive a free debt analysis.
