Should we always pay Credit Card minimum due?

Your credit card bill comes & this is the most common things highlighted on the first page:

Total due: ₹100,000

Minimum due: ₹5,000

So now you think, "Ok I’ll pay ₹5,000 this month & I’m done.”

But have you ever wondered what will it impact. You’ve just bought yourself expensive debt, because when you don't clear the full bill, this is what happens

1. Your interest-free period disappears

2. Interest will start accumulating on the unpaid balance.

3. Keep paying only the minimum and that ₹100,000 can take months or even years to clear.

4. Your credit card limit will start decreasing

So a just apply some useful habits

Don't compare credit cards by rewards alone.

Look at the interest calculation also and what happens when you carry a balance.

Because a card offering 5% cashback means very little if you're carrying a balance at a 30/40% interest rate.

RBI actually should apply rule for banks to warn customers about this exact trap.

Hope the blog will help you in taking a sensible & more meaningful decision

by
Narendra Kr Surana
Volatility Coach & a Wealth Architect
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