Some of you may remember back when minimum payments were about 5% of your total credit card debt. Since that time, the minimum level for your monthly payment decreased to about 2%, and in some cases, even lower. At the time, many perceived it to be a good thing. Suddenly their budgets loosened up and it seemed they had more money each month! What they didn’t realize was the long-term affect on their financial situation this would have.
Creditors know many Americans will only pay the amount required. By reducing the minimum amount due, you are paying less toward your balance and still paying the same amount to interest! By doing this, it will take longer to pay off the balance and, in turn, you will pay much more in interest!
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