The average student will be faced with the prospect of some credit card debt at some point in his or her life. This article will explain the reasons why you should make a payment beyond the minimum payment. It will cause you a great deal of harm if you only make the minimum payment and that is why it is a student credit card no-no.
If you buy a high definition television for two thousand dollars and your credit card rate is right around eighteen percent, let’s say you make the minimum payment. It will take you roughly twenty-seven years to pay this off and you will end paying almost five thousand dollars in finance charges. Think about that: you not paying beyond the minimum payment has ended up costing you five thousand dollars in finance charges. There is an assumption that your monthly minimum payment comes in at two percent.
If you make four percent of your monthly payment, this will cut down the amount of time you make a payment on the credit card by about seventeen to twenty years and you will only have to pay a thousand dollars in interest. Think about paying above the minimum payment and what this has done with this example from above. You have...
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