Confused with credit cards?

Question

I'm confused and wondering about this. I'm getting it first credit card (student one) from bank of America in a week and I was wondering if, for example, I buysomething for $100 and the minimum payment is $10, is it OKAY to pay ONLY the minimum payment and sometimes pay more? Will that make my$100 purchase eventually turn into something like a $175 purchase? If not, when DOES that happen??

Answer 1

Please don't get any Credi Cards. Stay Debt Free why you can. The Creditors are Preying on you. If you get in DEbt it will take you over 30 years to pay off your Debt. And if you do spend $100 it will end up costing you more than what you spent. My advice to is do not get any Credit Cards. Pay for everything in cash. You have college students out there commiting suicide because there in Debt. Don't fall into the Creditors trap. Debt was designes to eliminate your time. Don't do It. Again I must say Don't do it. I work in the Debt elimination and Credit Restoration Business. I hear terrible stories. Your young enjoy life. Someday you will have kids. You get in Debt and you will not have time for your kids because you will be working 2 or 3 jobs to pay for your Debt. Don't Do It. Watch Maxxed Out and you will see why I'm telling yiu this. If you see how these Creditors are raping us you will see. If you have any questions please email me at [e-mail] Thanks & God Bless, Tavarra

Answer 2

I work as a credit analyst underwriter at a credit card company, so I would have firsthand experience with your question. To give you the short answer to you question, is it okay to pay ONLY the minimum payment and sometimes pay more, is no, you should ALWAYS pay more than the minimum payment.

Keep in mind that the minimum payment is just that, the minimum that the credit card requires so you won't be late. Just paying the minimum, won't really help your cause, because you'll still rack up finance charges on the balance that's left over, and that's exactly how a $100 purchase eventually balloons into a $175 purchase. As a matter of fact, that's how a lot of people easily get into credit card debt because they lull themselves into a false sense of security knowing that they don't have to pay it in full, only the minimum payment, and before they know it, the finance charges will snowball out of control. Take it from me, I see it happen all the time.

The best way to use a credit card based on not only my findings, but from personal experience would be to make SMALL purchases that can either be easily paid off in full or in 1-2 payments. This way, you maintain a higher credit score by having more available credit open at all times, and you reduce the amount of finance charges by keeping a smaller balance.

Keep in mind that it's easier to spend on the cards, than to pay it back, so be careful and good luck!

Answer 3

The expense to a credit card is the interest rate.

if they are charging you 25.00 a month in interest and your minimum payment is $10.00 then , the bank comes out ahead and you never pay it off.

you should always pay more than your interest each month.

You should always go for the lowest interest card.

When you get your 1st bill you will see how much you are  being charged each month in interest.

You should carry a minimum balance, never, ever use more than 1/2 of your total available balance and pay over the interest rate each month, If they charge you $25.00 a month in interest then you have to pay a minimum of $35.00

or yes your balance will continue to go up and not down.

Good management of credit now, will help you later when you go to buy a home or car.

Failure to do so can have devasting consequences.

Don't be one of us who have gotten 10 cards maxed out (this is easier to do than it sounds) and can't make the payments.

Then it gets scary.

Best advice, 1 good, low interest rate card is enough.

Credit Unions offer the best available credit cards and savings, checking deals.

Answer 4

The tricky thing with minimum payments is the interest rate.  It's certainly okay to pay only the minimum.. but the longer it takes to pay back the amount, the more interest you're going to accrue each month.  You can check out this website here to see exactly how that would happen (make sure to have the interest rate details available to you.) http://www.bankrate.com/brm/calc/MinPaym...

Answer 5

Have your parents explain to you how credit cards work.