credit card question...say you have a credit card balance of $500, and you only have $200 in the bank...?

Question

will paying the $200 be better than paying the minimum of $10 that's due on the due date? like will the interest percentage be lower or it would still be the same?? thanks.

Answer 1

Of your $200 in the bank, pay as much of it as you can toward your credit card bill. This is way better than paying the minimum each month because paying the minimum doesn't lower the bill at all, just pays on the interest charges. So your bill is about the same each month, and doing this does nothing for your credit score. If you pay off as much as you possibly can each month till the bill is paid, it not only helps you by getting rid of a bill, but also makes your credit look good (so long as you are paying on time). The interest rate stays the same no matter if you pay $10 or $100, but the charges will be less the next month because you will have paid down the bill, so there won't be as much to charge you interest for. (Hope this makes sense!) Also, after you pay down your bill and keep it low or at nothing for like 3 months, you can call the company and ask them to lower your interest charges, and they usually do, because you now have a good track record with them, and they want you to charge again!

Answer 2

I wouldn't put all your money towards the Credit card but, some of it. That way you have some money if you need it. But paying the minimum is like paying the interest only. So the payments due will start going up and so would the debt so you need to make payments you can afford to keep the minimum down and pay off your credit card.

Answer 3

It doesn't have to be $200, you can put $100 keeping some in your bank. But yes you will pay less interest next month because your balance next month will be substantially less, not just $10 less. You'll almost never pay your balance off if you only pay that minimum payment. Pay as much as you safely can every month. Hope this helps you. :<)

Answer 4

Your interest rate stays the same. What would change is the amount of money in interest you pay. For example.. If you interest was 21%

21% of 500 = 105

21% of 200 = 42

The interest rate doesn't change. But lesser amount causes the total of the interest occured to lower.

Answer 5

No, it won't change your interest rate. And the interest charged on the $500 would have already been billed when you receive the statement.

Don't wipe out your account, but it is better to pay more than the minimum payment. I pay double the minimum payment to ensure that I'm paying interest & principal.

Answer 6

The percentage will still be the same, but the interest charged will be less since it will be calculated on the 300 remaining rather than 490. Paying more is always better, unless the percentage is less than the inflation rate (RARE), in which case saving your money is best.

Answer 7

Yes, paying the $200 will be better for you. The interest rate will stay the same, but by paying more of your principal balance, you will be paying less finance charges.

Answer 8

It is absolutely better! The more you pay now, the less interest you will have next month. Also, the lower your payment next month, so the easier for you to pay it off.

Pay as much as you can afford to!

Depending on how high your interest rate it, try to get a loan from your parents or something so that you can save yourself the wasted money on interest.

Also... let this be a lesson to you... don't spend more than you can afford.

Answer 9

The old rule of saving is: pay yourself first. If that $200 is all you have, you should hang onto it, because if you need money later for something else, you may not even be able to borrow it, except through a loan shark.
Once you have SOME money on hand, THEN pay as much as you can.
If necessary, cut expenses or, somehow, increase your income.

Answer 10

If you pay 10 dollars you will have an outstanding balance of 490, and you will pay EACH month an interest. The best thing you can do is pay as fast as you can.

Good Luck