Paying Only The Minimum Amount Due On Your Credit Cards Can Be Dangerous

One of the costliest mistakes your can make in your life is to continuously pay the minimum amount due each month of your credit card bill

. Even doing this for a few months could lead you into a financial hole which is extremely difficult to climb out of. Many individuals love using their credit cards solely because they feel they can spend on it as they desire and pay only a fraction of the full amount each month. People get into the minimum amount due trap so easily purely because of their ignorance of the overall terms and conditions of their credit cards.

Usually the minimum amount due is a fraction of your total monthly bill. It could be as less as one percent of the total. Obviously for most people, seeing the minimum amount they need to pay is a thrill and they continue to pay that amount with a sense of achievement. They feel they could spend money on household as well as other personal expenses and yet at the end of the month, they had spare cash from the money they saved by not paying the entire credit card bill. However, by the time these people realize the effects of their actions, it is already too late. The rest of the amount which you have been ignoring had already started attracting a high interest rate which only increased with each passing month. Given that these individuals continue to spend on their credit cards each month, the principal amount continues to increase. Coupled with that, the interest charges which are levied on the increasing principal amount month after month, you are left with such an enormous bill within a few months which is enough to completely ruin your financial future.

Repaying this huge amount is beyond the means of most people who live paycheck to paycheck. Credit cards are great for immediate shopping requirements, but paying only the minimum amount due for even a few months together can result in financial disaster. It is ok if you do not pay the entire bill amount for a month or two. But it is absolutely imperative that you do not extend this beyond the second month as otherwise the total amount due would be completely unreachable for you. Just in case you are already at that situation where you feel the amount due cannot be met by your savings or income; it is advisable to apply for loans such as vehicle title loans to pay off the entire credit card bill. Auto title loans allow you to use the loan amount for paying any kind of expenses. You can get the loan amount in your bank account within 24 hours in most cases and all that is required is the title of your car.

It does not matter how you repay your total credit card bill, but it is vital you do so at the earliest as otherwise you will be in a debt trap for several years to come.

by: Martin Lander

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