# Say NO to minimum payments on credit cards

Credit cards can come in handy, but the card companies don’t always tell you what you need to know.

Don’t pay only the minimum payments on credit cards.

Here’s how to calculate the true interest on your minimum payments.

## Minimum payments on your credit cards mean maximum fees.

Banks and stores deliberately make the minimum payments small. This means you can borrow large amounts of money without a sizeable monthly payment. What it also means, and it is not obvious, that there will be a large compounded interest on the unpaid balances for the banks and stores.

Here is how to calculate the real interest when you only make minimum payments.

• Take your annual interest rate and divide it by 12 months to get your monthly rate. For example, a yearly interest rate of 15% equals a monthly interest rate of 1.25%.
• Take the balance owed and multiply it by your monthly rate of interest. Say it is a \$5000 balance, so \$5000 x 1.25% equals \$62.50.
• Divide the monthly interest of \$62.50 into your monthly payment of \$150. That equals 42% which is the real interest you are paying when you only make minimum payments!
• In effect, if you only make minimum payments, you are only paying off your interest – not your principle.

Think about it. It’s not hard to understand why the banks and stores like minimum payments. They make loads of extra money, which is coming out of your pocket.

Are you a discharged or undischarged bankrupt? Are you almost finished your proposal or had past bad debt which has been paid off?
Then call Prudent Financial Services or click below to apply online today.