Sometimes giving the minimum amount of effort does not lead to outcomes we want. Putting the minimal amount into relationships, diets, or debt reduction is not enough. We need to give a little more.
The Minimum Payment Due in our credit card bills is the smallest amount the lender requires us to pay in that billing cycle. The amount is either a percentage of the total balance plus fees and interest or a flat rate if your balance is really small. In some cases, we see the minimum due is barely anything and we celebrate 🥳. “That’s all they want from me this month??” What luck! But not really. Leaving a balance on your credit cards that transfer from month to month is how the lenders earn from you, by charging interest. Interest is the cost to you of the borrowed money.
The more you only pay the minimum due, the longer your repayment window. The longer it takes you to pay off the debt, the more it costs you in interest. You get stuck running on a debt wheel.
You must try to pay more than the minimum on your loans. Also try to prevent yourself from getting stuck on the wheel in the first place. Budget your expenses so you do not spend more than you can pay off each month, and enjoy the feeling of being in control of your debts.
MMM tip: Our last recommendation was to pay $50 more than the minimum due. Can you try $100 more this month?
Until next week!
Dariene
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Disclaimer: This newsletter is for informational and educational purposes only and should not be considered financial, investment, tax, or legal advice. I am not a licensed financial advisor. Please consult a qualified professional before making any financial decisions.
