Credit Card Minimum Payments: What They Cost You

Credit card holders must pay at least the stated minimum amount by the due date. Paying more is allowed, while paying the full balance helps avoid interest on the unpaid amount. If the minimum payment is missed, the issuer may charge late fees or other penalties. Setting up automatic payments can help prevent this, provided there is enough money in the linked bank account. Where a minimum payment is lower than the finance charges for the billing cycle, the balance can keep rising. This is known as negative amortisation and can increase the risk of debt.

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