Credit Card: The craze for credit cards is increasing very fast in today's time. The reason behind this is the many benefits available on the card. If you make a payment with a credit card, then you get many benefits like discount offers and reward points. But many times people forget while making payment with it that a credit card is also a kind of loan. It can be as harmful as it is beneficial.

How correct is it to make a minimum payment of the bill

When you use a credit card, you have to pay its bill after a certain time. But when it comes to paying the bill, some people either pay the entire bill or make a minimum bill payment instead of paying the full bill. Usually, the minimum payment of a credit card bill is up to 5% of the entire bill.

If you pay the minimum due of the bill on time, then you can avoid the penalty for not paying the bill. Not only this, if you do not have money, then you can also avoid the penalty imposed on you by making the minimum payment.

Disadvantages of paying the minimum due
If you do not have money, then paying the minimum due can be beneficial for you but there are many disadvantages to paying it. You have to pay extra interest for a month on the remaining card bill. Which is 3 to 4 percent. Meaning that you will have to pay high interest of 30 to 40 percent annually. That too from the day you made the purchase.

Apart from this, it also affects your credit score a lot. Along with this, by paying the minimum due, you can also slowly get trapped in the debt trap. At the same time, in the coming time, you will not get any interest-free period on making new purchases with a credit card.

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