Asked by: Liene Padillopersonal finance credit cards
What happens if you only pay the minimum amount due?
Last Updated: 3rd January, 2020
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Beside this, will my credit score go down if I only pay the minimum?
As long as you're making at least theminimumpayment on time each month, you're actually helpingyourcredit score by building a consistent, positivepaymenthistory. When you pay only theminimum,your balance only reduces by a littleand a highcredit utilization will continue to hurtyourcredit score.
Subsequently, question is, what is minimum payment due? Your credit card terms require you to pay atleastthe minimum payment by the due date each month.Thispayment is the lowest amount you can payonyour credit card to avoid penalties. That means the higheryourcredit card balance, the higher your minimum paymentwillbe.
Also question is, what happens if you pay the minimum on your credit card?
Making the 'minimum amount due' paymentonyour credit card will reduce the outstanding balance ofthecurrent month but repeatedly making only minimum amountduepayment will not lower your debt(outstandingamount). However, it reflects in your creditcardbill/statement on a monthly basis only.
Should I pay minimum or full balance?
There is a common myth that carrying a balanceonyour credit card from month to month can benefit yourcreditscores, but that is not true. Ideally, you should payoffyour credit card in full every month. Leavingabalance will not help your credit scores. All it will doiscost you money in the form of interest.