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That moment I realized my 'minimum payment' strategy was a trap
About 8 months ago I was paying $120 a month on a $4,200 credit card balance. I thought I was doing fine because I never missed a payment. Then my brother pointed out that at that rate I would be paying for 6 years and the interest alone would cost me over $2,800. I pulled up a payoff calculator that night and it hit me like a brick. Has anyone else had that sick feeling when you see the real math on how long you'll be stuck?
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mark_ward26d ago
Minimum payment keeps you in a good habit though. My dad paid the minimum on his cards for like 15 years and his credit score was always over 800. Never had a late fee or a ding on his report. All that interest was basically the price he paid for never stressing about money or missing a payment. He could've paid it off faster but he wanted the cash for other stuff. Not saying you shouldn't pay more if you can but the minimum payment plan isn't automatically a bad move. It's more about whether you actually have the discipline to not rack up more debt while you're paying it down.
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alicemurphy25d ago
Isn't that just paying a subscription for the privilege of having debt?
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the_drew23d ago
Yeah the "privilege of having debt" part really hits it. That interest you're paying is basically a fee just to keep the account open and breathing. I watched my roommate do the minimum payment thing on a $4k balance and after two years she'd paid like $1,800 in interest and still owed $3,800. The card company loved her though. They'd bump her limit every six months like clockwork.
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