When should you pay the minimum on credit cards? This says Prophecy

2023-06-16 09:51:47

Covering only the minimum balance of your credit card can cause you to pay more for the interest generated and you will also lengthen your debt for a long time, so you should avoid it

June 15, 2023 12:45 p.m.

MEXICO.- Having a credit card implies a great financial responsibility and you must consider that this is not an extension of your salary, but a loan that sooner or later you will have to pay.

With this minimum payment you prevent the card from being disabled | Pexels

Cover only the minimum balance of your credit card It can cause you to pay more for the interest generated and you will also lengthen your debt for a long time, so you should avoid it.

What are the minimum payments?

According to the Federal Consumer Attorney (Profeco), the minimum payment of a card is a percentage of the total debt to be paid for the use of the card and the outstanding installments for the month.

With this minimum payment you prevent the card from being disabled, the collection of default interestnon-payment fees and affect your credit history.

He minimum card paymentit depends on each bank, but it is between 2 and 5% of the total balance, which implies that people will pay interest for the rest of the uncovered balance and by doing it every month, the debt will simply spread.

In which cases must you pay the minimum on the card?

This action is not recommended, but only in the following cases you must pay at least the minimum:

• In case of emergency and when you cannot cover a little more, with this you will not affect your history and you will avoid default interest
• If your debts are high and the only option is to pay the minimum, it is recommended to refinance the debt with another cheaper credit, at a lower annual rate
• Before resorting to this measure, you should know how long it will take you to pay off your debt with the minimum payments and the annual interest rate of the card.
• If you only deposit the minimum you put your finances at riskbecause the debt can accumulate and it would be more difficult for you to pay it off, and in case of an emergency you would no longer be able to have this means of payment
• If you deposit more than the amount requested, you will get out of your debt faster and you will pay less interest