28.2 C
Tuesday, March 21, 2023

What To Know About Credit Card Minimum Payments – Forbes Advisor Canada

A minimum monthly payment is rarely equal to the card’s total balance. If cardholders make only the minimum payment and continue to charge to the card, interest can accrue quickly and balances will continue to increase. Not only will the minimum payment increase, but when a cardholder only pays the minimum payment, he or she risks damaging his or her credit score.

As a credit card balance increases, so will the credit utilization rate (the percentage of a credit line owed to all issuers). Financial experts recommend cardholders keep their credit utilization rates under 30%. A utilization rate greater than 30% can lead to a decrease in the cardholder’s credit score.

For best practice, resist spending more than you can afford. Pay off balances every month in full. By doing this, you can avoid interest and keep your credit utilization rate as low as possible. If this…

Read more…

See also  Narita airport starts facial recognition trial run for faster travel

Related Articles

Latest Articles