For example my min. monthly payments are $50 and my balance is $1000. Would it be best to make the bare minimum monthly installments and save my money until I can pay the $1000 in one shot or make a $100 payment each month?
2007-07-02 00:23:07 · 12 answers · asked by Anonymous in Business & Finance ➔ Credit
If you pay £100 a month then it will be paid in 11 months and each month the interest you pay will go down. If you wait for 11 months and then pay it you will have to pay more interest.
I would always say pay off what you can, when you can. It is too easy to find something you want for another $1000 at think you can pay it back later. Don't fall into this trap - the people who benefit are the credit card companies.
However , if you can find an interest free card for 10 months then you have not lost anything and could afford to wait the 10 months before you pay up.
Martin Lewis (UK) has some very sound advise on credit cards - you could look him up.
I think its Money Saving Expert.com
2007-07-02 00:38:57 · answer #1 · answered by sheila 3 · 0⤊ 0⤋
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2016-07-24 20:31:04 · answer #2 · answered by ? 3 · 0⤊ 0⤋
If you paid $100 a month the debt will be paid off under a year.
If you pay minimum payments you will be paying several years, and most of the money will go toward interest payments.
So from a savings standpoint it is crazy to pay only minimum payments. But if you are really tight on money, you may have no choice but minimum payments, but you MUST find some disposable income to help pay it off quicker,,,and QUIT using the card!
2007-07-02 03:05:24 · answer #3 · answered by Anonymous · 0⤊ 0⤋
There are only two reasons to not pay off your credit cards as fast as possible:
1. You have a credit card with 0 interest, and you have the money sitting in something that makes interest.
2. If you pay it off too fast, you won't be able to afford food, medicine, or rent.
Keeping your money just so that you don't have to pay it off faster may feel better psychologically, but it does not make any kind of financial sense.
Remember, if you keep a good credit record, and life throws you a big problem that takes a lot of money (like health issues) you can use your credit card to bale yourself out. But if you've allowed your card to carry a high balance for a long time, you won't be in much of a position to lean on it in times of trouble.
2007-07-02 01:33:11 · answer #4 · answered by nojunk_9 3 · 0⤊ 0⤋
Pay as much of it as possible.
You should be saving at least 20% of your income for savings. If you have any credit card debt then that 20% should go to paying that off. Credit card interest rates are usurious. If you have a hard time not using your card for purchases than cut the thing in half. Remember, it is all about parting you from your cash by any means necessary.
2007-07-02 00:30:28 · answer #5 · answered by Ken M 2 · 0⤊ 0⤋
Better to pay more each month.
First, it looks better on your credit record that you pay more than the minimum. Creditors look at that!
Second, It will reduce the overall amount that your paying in the long run. Minimum payments only pay a small part of the primary amount. Most goes to the interest. If you pay extra, the amount of interest you pay goes down slightly, because you've lowered your amount of balance.
2007-07-02 00:40:25 · answer #6 · answered by rklee0122 4 · 0⤊ 0⤋
No. I will move a balance from one credit card to another, if the latter has a lower interest rate. But in the end, borrowing to pay for borrowing just leads to more debt. I am curious - if you don't want a political answer, why did you ask this in the politics section?
2016-05-21 01:21:41 · answer #7 · answered by ? 3 · 0⤊ 0⤋
I am an older guy with lots of experience using credit cards. Fortunately I married a gal who is very frugal. I am sure she saved me from getting into financial trouble with credit cards.
Throughout our marriage we usually paid off all credit card balances BEFORE they started to be charged interest on the balance. In other words, we paid it off each month.
I recommend that you do the same. Then, in time, you will have credit card companies begging for your business. I am looking at a stack of credit cards on my desk right now. I only use two of them. We have our home on 5 acres and cars paid off and we never made a whole lot of money..
Pay as much as you can. Try to stay at a ZERO balance and you will be much happier as time goes by.
Credit Card Basics: http://www.squidoo.com/gocreditcard/
2007-07-02 02:04:23 · answer #8 · answered by Anonymous · 0⤊ 0⤋
Pay the $100 each month.
You will save money on interest.
Also, creditors tend to look more favorably on those who pay more than the minimum. Which could mean an easier time in getting credit limit increases, decreasing your interest rate if it is high, etc.
2007-07-02 00:31:27 · answer #9 · answered by echo 7 · 2⤊ 0⤋
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2016-07-07 16:06:32 · answer #10 · answered by Anonymous · 0⤊ 0⤋