Let us face it. Most of us own at least one credit card if not more. Getting a bill every month is always an agonizing experience because that makes us realize how much we have spent. Often we end up realizing that we didn’t need to spend that kind of amount or worse still, realize that we cannot afford to pay the entire amount due that month. So we end up making the credit card minimum payment, hoping to clear the balance next month. We repeat this exercise the next month too, and the next month and the next month…till we are caught up in a vicious circle where we pay only credit card minimum payment. This doesn’t bother many of us since making credit card minimum payment doesn’t affect our credit report. We seem to take it in our stride and let the to-be-paid amount to pile up till we have a huge credit card debt to pay off.

It’s not uncommon to pay credit card minimum payment. In fact a whooping thirty percent are paying only the credit card minimum payment. For the first time users credit card minimum payment means the lowest amount that we can pay to make our account stay in good standing. While credit card minimum payment helps us to pay our debts without getting a bad credit report, it somewhere down the line also makes us to take our debt for granted. Opinions are much divided on this issue.

However one thing that stays true is that if you are just paying minimum credit card payment you are being sucked into a circle of debt and possible bankruptcy! The credit card minimum payment is calculated as a percentage of your current balance. The credit card minimum payment drops as your balance is paid, but thanks to the magic of compounding, you'll end up paying for a long, long time. This is something that most people are not aware of and end up paying minimum credit card payment only. So not only do we keep piling up huge debts to be paid but are unaware of the hidden cost that we also have to pay while paying minimum credit payment.

Earlier the credit card minimum payment used to be around 2- 2.5%. However some time ago US government has increased this percentage to 5%. This was because people would make only credit card minimum payment, thus increasing their debts. To make people pay up their debts faster the government took this step to increase the interest rate. And it seemed to have worked like a charm! Many people are now shelling out more than merely paying minimum credit card payment.

It is better to pay off full payment than paying credit card minimum payment if you wish to save your hard earned money because if you go for the minimum payments, that will in the end will take you to a big lump sump amount to be paid which will leave you helpless and you will find no way out other than paying it and loosing your hard earnings in one payment.

• How To Eliminate Your Credit Card Debts - By : Peter Brown
  
• Make Credit Card Balance Transfers Work For You - By : Michael D. Strauss
  
• First Steps To Choosing A Credit Card - By : Michael D. Strauss
  
• Credit Card Debt Consolidation - By : Ben Needles
  
• How To Avoid Credit Card Fraud - By : Ben Needles
  
• Cash Back Credit Cards Reward Regular Spenders - By : Michael D. Strauss
  
• Credit Card Debt Management - By : Ben Needles
  
• Introducing Credit Cards Specifically For Small Businesses - By : Michael D. Strauss
  
• Your Credit Card Options With A Poor Credit Rating - By : Michael D. Strauss
  
• Why Not Use Credit Cards To Build Credit - By : Ben Needles