Why You Should Pay More Than the Minimum Balance on Your Credit Card

Nov 9, 2022Financial Literacy

As detailed in a previous blog, credit cards can offer convenience and flexibility, and some even offer rewards.  Often, credit cards make it possible to afford larger purchases when you don’t have cash readily available.   

Using the free *Native American Financial Services Association (NAFSA) Financial Literacy Program, you can explore online playlists with many modules that relate to overall financial competency, whether this is understanding your credit scores and reports or creating a budget, our curated playlists will provide you with important information.

Why You Should Pay More Than the Minimum Balance on Your Credit Card:

A key component of your credit card is the payment and billing cycle.  Throughout a one-month billing cycle, the card can be used to make purchases up to a predetermined credit limit.  Payments can be made in full, or you can pay off your balance over time, while still using your card.  What this essentially means is you are taking on short-term debt.  

Using your credit card can be a great way to build credit history.  But it is important to understand credit card payments and fully understand credit card debt. 

In this article, located in the Financial Foundations playlist, you will learn more about how to understand credit card debt and how to avoid it.  You’ll learn about what a minimum payment means on your credit card bill, what happens when you only pay this minimum, and ultimately why paying more is something you will want to consider.  The article also talks about getting out of credit card debt and provides additional outside resources with debt relief.  Credit cards can be a great tool, they are convenient and can help you build your credit.  This article will help in providing some fundamentals you should consider when making credit card payments.   

The NAFSA Financial Literacy Program provides a variety of modules and tools with easy-to-understand information to help people better comprehend their finances and make more informed decisions.

Explore the program today: https://nafsa.everfi-next.net/welcome/nafsa-achieve

*The NAFSA Financial Literacy Program content contained on the NAFSA web page(s) referenced above, and on any subsequent pages created by our service providers/partners, provides general consumer information. It is not legal advice or regulatory guidance. There may be other resources that also serve your needs and you are always encouraged to, and should, consult with your own professional advisors prior to making any financial decisions.

 

Pin It on Pinterest