For example:
If you have a credit card with a balance of $3000 with an interest rate of 17% and
you only make a minimum payment of $25 per month here is the result-
It will take you 126 months to pay off your debt if you make minimum monthly payments on a balance of $3000 with a 17% APR. During that time you will pay $2241 in interest charges.
If you change your payment to just $30 a month it will take you 115 months to pay off your debt and you will pay $2152 in interest charges. This simple method of increasing the minimum payment by only $5 a month takes off 11 months and saves you $89 dollars over the life of the debt. This savings would increase as your monthly minimum payment increases as well.

• Paying more than the minimum balance means that you are going to have the available credit if you need it. If you do have an emergency and need to use your credit card your efforts at paying more than the minimum balance will leave you with more credit to utilize if you have to.


• Paying more than the minimum payment is really the only way to become debt free. If you only make minimum payments on your credit card, there is a very good chance that you are never going to get out of debt, because you are never going to be keeping up with the interest payments. Keep in mind that the interest is going to be accruing faster than you can pay it off, and that is something you never want to happen.

One of the major problems in repaying credit cards is in the size of the repayment that you may be making. In the early days of credit, the minimum repayment level was generally around 5% of the balance, but over the years this has drifted downwards with 2.5% to 3% being the norm nowadays, with some cards even going as low as 2%. While this can make the repayment more comfortable for your budget to handle it begins to put you in a position where you can never pay the debt off just by making the minimum payment.

So even from just a quick look at repayment levels, it is plain to see that if you only make the minimum payment required on your statement, you will be prolonging the life of your debt by many years and vastly increasing the amount of interest that you will be paying in total. How can you best avoid this?

The best way to handle credit card payments is to set up an automatic payment of the minimum, so that you will at least be sure that every month you will at least be staying within the terms of your credit agreement and not risking damage to your credit rating. Then, at the end of the month, make an extra payment of as much as you can possibly afford without borrowing from another source. Keep in mind that even if you can not afford to pay a large amount, every little bit helps especially as all of it will count towards reducing your credit card balance and not paying off interest charges.