As a general rule, interest rates for the unpaid portion of your credit card balance are very high. When you’re struggling financially, it’s tempting to only make the minimum payment on your credit card, but doing so will only worsen your situation. You’ll end up paying a lot of money that’s mostly applied towards the interest you owe, and barely makes a dent in the outstanding principal balance of your loan.

If you pay the minimum toward your balance each month, here’s what you can expect to happen:

You’ll Pay Much More Than You Owe

Check out the “Minimum Payment Warning” on your credit card bill. It includes a table that shows the total amount of money you’ll pay over the years if you only pay the minimum every month. If you only pay the monthly minimum, you could end up paying several times the amount you owe by the time you finish repaying the loan.

Larger interest charges

To estimate your interest charges, divide your card’s annual percentage rate by 12 and multiply it by your average balance. If your card has a 21% APR, for example, your monthly interest rate would be 1.75%, or 21% divided by 12. Multiply that by the balance you’re carrying. If you have a balance of, say, $10,000, you’d owe about $175 in interest next month if you paid only the minimum now.

Your Credit Score Could Go Down

Experts recommend keeping your credit card utilization below 30%. The percentage applies to the total of all your available credit and for individual credit cards. High usage is especially damaging to your credit scores if you have a short credit history and few accounts. To improve your credit scores, you have to start paying more than your monthly minimum payment to start lowering your balances significantly.

The Minimum Payment

This credit card statement shows how dangerous the minimum payment can be. This statement has a balance of $7,739.26 and if you made the minimum payment you would pay a total of $21,849 over the next 20 years.


  • Previous Balance $7,739.26 $7,739.26
  • Past Due Amount $584.34
  • Payments $0.00
  • Other Credits $0.00
  • Purchases + $0.00
  • Balance Transfer + $0.00
  • Cash Advances + $0.00
  • Fees Charged + $38.00
  • Interest Charged + $101.55
  • New Balance $7,878.81
  • Credit Limit $0.00
  • Cash Limit $0.00
  • Available Credit $0.00
  • Available Cash $0.00
  • Statement Closing Date 05/15/2019
  • Days In Billing Cycle 30


New Balance $7,878.81

Minimum Payment Due $7,878.81

Payment Due Date $7,878.81

Late Payment Warning:
If we do not receive your minimum payment by the dates listed above, you may have to pay a late fee of up to $33.00

If you make no additional charges using this card and each month you pay You will pay off the balance shown on this statement in about And you will end up paying on estimated total of
Only the minimum payment 20 years $21,849 $21,849 $21,849

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