Minimum Payments

Credit cards can be useful to help consumers buy items immediately and pay for them later. Some credit cards offer you zero percent financing over 6 to 12 months or longer. Those who budget and plan their expenses accordingly can take advantage of the benefits offered by credit cards. However, those who rely on a credit card as a source of “free money” may find themselves in debt.

Each month, when you receive your credit card bill in the mail, you should be able to fully pay it off, showing that your spending is under control and that you are living within what your resources can support. However, if you are unable to pay off your debts and they increase from month to month, you may face financial trouble.

Many people believe that if they can make their minimum payment each month, they are in a financially stable situation. However, a minimum payment is actually just a small amount of what you should be paying each month if you want to avoid long-term debt.

By only making minimum payments, you are setting yourself up for long-term debt, and over time, you could even owe twice as much to your credit card company as you owed on your original purchase. Your credit card company makes its profits on the interest that you must pay on your debts. Therefore, creditors make little effort to inform their customers of the dangers of long-term debt.

Contact Us

If you are having trouble paying off your debt or are facing other financial difficulties, the Austin bankruptcy lawyers of Slater, Kennon & Pugh Ltd.LLP can help. Contact our offices today at 512-338-1100.