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FDIC Consumer News
Special 10th Anniversary Edition - Fall 2003
Minimum Payments, Maximum Costs on Credit Cards
While it might appear to be a good deal to pay only the minimum amount due on your credit card's outstanding balance each month and keep the extra cash for other bills, this could be one of the worst financial moves you can make. Why? It will take you a very long time to pay off the balance, and the interest costs (often quite high on credit cards) can be shocking. Example: If you pay only the minimum due, a $500 television would cost you more than $900 (including interest costs) and require eight years of payments.
So pay as much as you can on your charge card each month pay the entire balance, if possible to avoid interest charges. If all you can afford is the minimum amount, pay that... and pay it on time to avoid a late fee and other potential problems.
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