Question

what are the long term effects of making credit card purchases with only minimum payment made?

Answer 1

Credit minimum payment is generally near to 5% of the total debt value or amount due for payment. For such deferred payment credit card providers charge a high interest rate depending upon country and location.

Credit card company or financial institution charges high interest to people who defer the payment because the credit card business depends mainly on interest income coming from such people.

The deferred due is charged to next month credit card payment cycle along with finance charges which keeps on compounding if an individual defers payment on regular interval.

Finally, individual who keeps high rolling dues they suffer low credit score or low FICO score and that impacts badly when individual goes for fresh borrowing or a new loan and such individuals are charged high interest or face trouble in getting new loans at low cost.