CREDIT CARD! Minimum Payment and Purchase Interest?? Help.?

Question

I am very confused. A little while ago I recieved a credit card. Its a Visa Student credit card. Now my minimum payment was "$10" and I had racked up allmost "$1540". My parents told me that the $10 minimum payment was my "interest". I said ok so I payed the minimum payment. Now I have recieved something called "Purchase Interest" for $47. I just need some information what is going on???

Answer 1

First of all using a credit card is not a good idea, if you can afford to pay cash then you don't need it.  Paying the minimum payment will not put a dent on what you owe.  You should try to pay at least $50-$100 per month.  

You seriously need to read the terms and conditions that you received when you accepted the credit card.  

The amount you owe will double before you know if if you don't pay more than the minimum and you are headed to "credit ruined street"  

Be smart pay off the CC and use cash.

Answer 2

If you charge on your cc and only pay the minimum amt due then you will have a balance on your card.  You will be charged interest on the balance,  which is the money they charge you for using the credit.  you should try to pay it off and only use it for emergencies.  credit cards suck.

Answer 3

They charge interest on what you purchase for that month, call the company they will help explain it to you!!

Answer 4

Purchase Interest is the amount of interest that has accumulated from the things that you have bought it is never good just to make the min payment. If you do that your balance will just go higher and higher. Just pay it as soon as possible to get rid of that head ach

Answer 5

As others have said, the $10 is not your interest.  It's the minimum you must pay the credit card company.  Paying it at least lets you avoid getting a missed payment charge as well as defaulting, which will send your interest rate skyrocketing.

The $47 is the interest on your purchases.  You will continue getting interest charges every month unless you pay off the entire balance ($1540 in this case) of each statement.

If you can't pay this, I'd recommend returning items you don't need that you charged to the card.

Answer 6

Minimum payment is what keeps your account current and avoids it going into default. By paying only $10, that means the card company gets to charge you interest on the oustanding balance...that's how it ballooned up to $1540.

Your parents are wrong and don't solicit anymore advice from them, they'll send you to credit card h**l in a hand basket (no offence).

The interest you got for $47 is what you have outstanding. You have to pay down your balance and FAST. Don't ever pay just the minimum...that's how they keep you broke and keep putting millions into their own pockets.