Credit Card Minimum Payment-Credit Card Tips UAE
Making a minimum payment on your credit card looks easy and it is. You just need to pay around 3%-5% of your outstanding credit card bill. But this short-term solution which can have long-term repercussions.
Minimum payment is the lure used by credit card companies to make you spend more and unnecessarily too. The thought of enjoying a product or a service and having to pay very little towards it every month is very tempting but when you really give it a thought, you are on path to accumulating credit card debt.
The interest on your credit card keeps compounding on your outstanding balance and this can materialize soon into a debt snowball which would ruin all your finances.
When debt accumulates, your locus of control also shifts from internal to external. Then you will start leading a life based on how you can manage the debt. You would be always worrying about ‘how to manage your credit card debt’. This in itself can affect your personal and professional life.
So think twice before you inculcate the habit of minimum payment on your credit card. Old habits die hard.