Don’t Fall Into the Minimum Payment Trap


Don’t Fall Into the Minimum Payment Trap

Don’t Fall Into the Minimum Payment Trap

Many credit accounts have a payment system that they refer to as the “Minimum Payment” or “Minimum Amount Due”.  Don’t fall into this situation thinking that they are helping you out.  The fact is that they make a lot more money if you pay the minimum and you stay in debt to them for a very long time.

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The “Minimum Payment” that they are basically referring to is the payment toward the percentage rate on the credit line that they have granted you.  It often does not reflect any actual payment to the balance.  If it does apply any portion to the balance, it is a very small amount.

You first must understand that credit card companies and other various credit line companies are in business to make money.  Making money for their companies is not an evil or bad thing.  It is simply the free enterprise system which our country’s financial system is based upon.  It is up to you to not fall into this type of payment cycle.  They offer this to you so you can make the payment to their company and keep your account open to make further transactions on it.  They are just protecting their interests for their companies.

Unfortunately, it is also the quickest way to fall into debt.  The best way to stay away from this type of payment cycle is to have a budget to follow.  You can figure in your normal payment, not the minimum due, and already plan to pay it in full at the end of the month.  If you follow your budget and have the discipline to not buy anything on a whim, your budget tracking program such as Easy Budgeter will make sure you have the money to make that payment in full at the end of the month as long as you keep it current and very accurate.



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