Most credit card holders are enticed to resort on paying off the minimum payment for their monthly credit card dues. Minimum payments may sound really good and they may come off as a kind offer from creditors. In the long run, however, they tend to be a borrower’s worst nightmare.
Where Does the Danger in the Minimum Payment Lie?
There is nothing more enticing than being able to spend a four-figure amount of money and have the choice of paying it in the lowest possible three-figure amount you can “afford.”
If you look at it from the perspective of a person how is keeping up with credit just so he or she can avoid paying fines in times when giving something more seems to be a little too far beyond what the person can pay-out, then this can be advantageous.
This is as when one gets to pay the minimum payment, no fines will be acquired by the account holder for that month due to delayed or missed payments. Thus, this is a great way to help card holders get by.
However, “getting by” can turn to be destructive especially when one can actually afford to pay way beyond the minimum. The amount of the unpaid part of the debt due that certain month will add up to the original amount of debt and the interest will grow over along with the borrowed amount.
In the end, by being comfortable in the notion of being able to pay the minimum one actually traps himself in a quick sand of bigger debts and higher interest rates to cope with.
How to Avoid Being Stuck in the Gripping Claws of the Minimum Payment Trap?
Being stuck in a quick sand of debts is one of the most frustrating things a person can ever grapple with in his life. This is especially when it comes with a regret that pierces the person with the question “why I didn’t I take full control of these dues when I had money to spare?”
At everything, being cautious and mindful of one’s spending and debt repaying habits is the best way to go. Of course, one must learn the difference between needs and wants. Most of the times people tend to splurge credit card borrowed money on wants than needs.
Also, being true to that goal of getting debts paid and beating repayment time-frames surely helps a lot when it comes to taking yourself away from the troubles of grappling with and barely coping up with huge amounts of money to pay-off.
Put a feasible budget plan together and be faithful to it. Keep funds in the bank or set-up credit card repayment systems that will automatically direct funds to repay your outstanding balance.
While there is ultimately nothing wrong with opting to go for the minimum payment on certain and inevitable situations, there will always be ways so that you can get yourself together to stay away from credit card troubles. Besides, the fact that you are granted by your creditor that certain credit limit, goes to show that you are actually capable of paying something beyond the minimum each month.
Written by www.personalfinancenow.co.uk and www.thesavingsblog.co.uk
