Don’t Pay Only the Monthly Minimum on Your Credit Card

Don’t Pay Only the Monthly Minimum on Your Credit Card-Part One

You may think that when you pay on time the minimum amount due on your credit card at the end of each month, you’re being financially responsible.  Think again. 

True, paying the minimum on time will keep you from being hit with late fees or suffering a blow to your credit rating.  But that’s not the whole story. 

The long repayment period

Consider the following: If your credit card’s outstanding balance is $926.53 and the interest rate is 19.9% -- a widespread rate these days – then paying only the minimum required each month means it will be eight years and two months before you’ve paid off the full amount.

If your credit card’s outstanding balance is $4,797.36 and the interest rate is still 19.9%, then paying only the minimum required each month will mean it will be 42 years and one month before you’ve paid off the full amount.

It’s not just that you’ll be repaying what you borrowed on the credit for as far as you can see into the future: it’s that you’ll be paying a huge and unnecessary amount of interest in addition to repaying the original sum.

In part 2 of this series we’ll cover unnecessary interest expense and how your minimum payment is applied.

Till then for more valuable financial advice, please visit us at prudentfinancialservices.net

Make Sure You are Comfortable with the Repayment Process for Bad Credit Loans

No one said you could not get a loan after you have defaulted on others, but you have to know that sometimes bad credit loans come at a very high cost. The reason for that is because lenders consider someone that has already failed to pay their bills is a high risk client. Sure, in the current economic climate where homes have been repossessed because of bad lending practices, even people with good intentions for paying their house off have found themselves stuck with a credit rating that stinks. While many say it is not their fault, the fact still remains that few lenders want to take a risk without making sure their backs are covered.



If it is time to step back into the market for loans after bankruptcy, you really should get enough information to do it right this time. What that means is that you should never take out any kind of bad credit loans or any other loan for that matter where the interest rate is just going to get bigger in the next few years. That is just setting yourself up for failure and ruining your chances of paying off the money you owe. Of course, there are not many of those types of loans around today, but you should never take that for granted.



When you do talk with lenders as you check to see which ones have the best options for you, be sure to read all the paper work that explains what you are doing before you place your name on the dotted line. Bad credit loans are usually an attempt on the part of the borrower, to place themselves back into a better financial position, but that will not work if you cannot afford to make these payments either. Just be patient and take all the time you need to become a well informed consumer and you are sure to be all right.



It doesn’t matter what the reason is that brings you out looking for bad credit loans, you have to do your home work so that you will get it right. You may be looking to rebuild your credit with loans after bankruptcy, or after you have had a foreclosure filed on your property, when you do find yourself searching for a way to get back into the black with a some kind of loan be sure you check to see that you are getting the lowest cost bad credit personal loans possible so that you will be more comfortable with the repayment process.



For more valuable information, visit www.prudentcreditrepair.ca