Tuesday, 2 June 2020

PAYING THE MINIMUM BALANCE ON YOUR CREDIT CARD | Financially Fabulous

PAYING THE MINIMUM BALANCE ON YOUR CREDIT CARD | Financially Fabulous
29 Aug
5:33

Welcome to LimorTV the place to be to learn about money and get inspired to take small steps to improve your finances While I'm not a financial planner, I'll show you what I've learned

In this episode, I'll be talking about why should make more than just your minimum payment on your credit card bill come on this will be awesome! When you make a purchase on credit card and you get the bill in the mail you may be tempted to make just the minimum payment After all it's the smallest number on your statement and the least that you can pay without getting into trouble with your credit card company and ruining your credit It can be really easy to pay the minimum balance and think that you'll deal with the rest the payment at a later time While making only the minimum payment today feels like taking the least amount of money possible out of your bank account, in reality this decision does quite the opposite You land up paying much more than you bargained for It's like the opposite of the sale instead of buying an item at a discount, it's like volunteering to pay extra for it

Let's look at an example If you spend $500 on clothing and you put it on a credit card with the nineteen percent interest rate if your minimum balance is just three percent of your balance you'll be paying $15 If every month you only pay the minimum balance it will take you forty eight months to pay it off you'll eventually paid two hundred and sixteen dollars in interest It actually cost you seven hundred and sixteen dollars that's why I think of just paying the minimum balance on your credit card as the anti-sale or more eloquently put throwing your money in the garbage That means that you'll still be paying for these outfits in 16 seasons from now

What are the chances the outfits will still be in fashion?? I'm betting they won't be The other trouble is the balance owing on your credit card keeps growing and accumulating If you only pay the minimum balance you may often be easy to justify spending another $500 because it seems like it's only costing you $15 every single month I have to worn you, this is a slippery slope and before you know it you can find yourself a lot of deb Let's take a look at another example

Let's say that you now owe $10,000 on your credit card with 19% if the minimum balance owing is 3% every overall balance you'll be paying $300 a month the minimum balance it will take you are you ready for this 258 months to pay it off! That's 21 years! What's even crazier than that is that you'll be paying $10,834 in interest You'll be paying more interest than it actually cost you to make the original purchases what's worse is that what you already have a lot of debt, a significant portion of your paycheck every single month will be allocated towards your debt payments That makes it even more challenging to live within your means So please I urge you to think twice three times or even more time before you make a purchase that you can actually afford because if you only make the minimum payment, you'll be over paying as well as paying for it a very very long time That brings me today's tweetable: make sure that you're not paying for an item long after you want it

Here is my challenge to you If you owe a balance on your credit card I want you to take a look at your monthly statement and determine how long it will take you to pay it off This is especially importabt if you've only been making the minimum payment Once you determine how many months and or years it will take you I want you to think about if you still want to be paying for that part too distant future The only way to shorten your timeline is to increase your payment and pay off your debt

Going forward do your best to make more than just the minimum payment Leave a comment below letting me know what you think about minimum payments Don't forget to access the free downloadable below at wwwLimorMoney to help you with this challenge

Did you like this video? Did you learn something? Subscribe to my channel and share it with your friends And if you want even more tips and tricks to make your financial journey fun and exciting come on over to wwwLimorMoney and sign-up for e-mail updates remember I'm not here to change who your are or how you live your life

I just have strategies to make you be even more Financially Fabulous Thank you so much for watching and I'll catch you next time on LimorTV!

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