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Credit Card Minimum Payments Create Debt
By: Peter Kenny
A credit card minimum payment means that you can spend more and pay as little
back as the credit card issuer will allow you. Sounds great in theory but it is
a system that will turn out to be your worse nightmare. If you stick to it
before long you will find that you have reached your limit, have nothing left to
spend and all the while your past purchases are totting up interest charges.
These sequence of events make your minimum payments so high, that you can only
afford to pay back the interest charges and your debt remains the same, with no
light at the end of the tunnel as to how you are going to clear it.
This is where the credit card companies have gotten wise and by reducing the
minimum payment steadily from 10% on original credit cards to the 2% that most
now have set, they have seen a way of making as much profit from you and I as
possible. By reducing the minimum payment to such a low level, they have given
the customer a false picture on how much they can spend on their credit cards
and how much they can really afford. With the minimum payment now sitting at 2%,
those who cannot clear their credit cards in full each month, will now see
interest charges being added to interest charges, as their balance increases
month by month.
To reduce your debt stop using your credit card
This is a position that many find themselves in and by noticing it early on you
could be saving yourself a lot of grief and a good bit of money. If you are
there at this point, then the best thing that you can do is to stop using the
credit card altogether and start to look at ways to reduce your outstanding
debt. Even if you find that you have to cut back on other expenditure, you
should deal with a debt that is a drain to your finances and by saving now on a
few luxuries it will be to your advantage. As you pay off you balance quicker
you will save more in interest charges.
Always remember that by paying minimum payments and minimum payments only, you
are playing a very dangerous game with your hard earned cash. So why should you
work many hours a week just to feed the profits of a bank or credit card issuer,
who will be your friend until such a time you cannot afford to pay back the cash
that they let you borrow.
Take action today!
About the Author:
Peter Kenny is a writer for creditcards-gb, For additional articles and an
extensive resource for everything about credit cards, please visit us at http://www.creditcards-gb.co.uk
and http://www.creditcards2go4.com
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