Minimum Payment on Your Credit Cards
// July 28th, 2009 // No Comments » // credit cards
When we like something we buy that without thinking about the amount of money that he/she has to pay at the end of the month. Checking on buying habit is very tough. For this reason a huge amount of money may be in due on your credit cards. Now if someone does not have that much amount of money to pay then he decides to pay the minimum amount of the due, in hope that on the next month I will be able to pay the due.
This situation gets worst when this minimum payment is repeated again and again. A huge amount of debt on the credit card has to be faced by the owner. If you are not able to clear the debt then bank ceases your credit card and raise bankruptcy issue against you.
The compounding factor on minimum payment of card plays a huge role and the debt goes on increasing after every month. The actual rate of compounding was 2 to 2.5%. But, recently it has been raised to 5%. So now compounding is really very fast and the debt amount becomes huge within few months which may not be possible for the user to pay. So it is better to avoid minimum payment on the credit card.
