Credit Card Minimum Payment Does Not Help
What is minimum payment?
Why does paying minimum amount not help?
Best possible ways to climb out of debt:
In this manner 20% of the amount outstanding gets added back into the outstanding for the next billing cycle. If the minimum payment is very less, the interest component increases till it becomes very difficult to pay off the outstanding amount. When you eventually wipe off the outstanding amount you could have ended up paying even 8-10 times the original amount you took as loan from the credit card company.
If you are hooked to making minimum payments every month then be aware as your credit worthiness is going to take a severe beating and may hamper your future loan prospects as credit rating agencies are watching all your details.
To summarise, there are a few facts that you must ask your credit card company before you buy the card from them. Find out, for example the minimum amount, the interest on the outstanding and the principal amount that gets wiped off every time you make a payment. Choose a card that has a higher minimum amount and lower interest rate. Once this is done, use the reward points to your advantage so that you do not pay for every purchase, but combine purchases to earn maximum reward points. Manage your expenses within your earnings and keep your loan outstanding to the bare minimum. It is a good practise to use cash wherever possible and keep credit card purchase to only bulk purchases.
Remember money saved is money earned!