Think that paying the minimum sum is good enough? Think again!Ī debt of $5,000 could take more than 14 years to pay offĪssume you have a credit card bill of $5,000 with Bank X. In short, any unpaid amount on your current bill will be rolled over to the next bill, and charged an interest on top of that. Interest will also be charged on any new purchases until full settlement is received.Any interest not settled by the next payment due date will also attract interest in the next statement.Interest is charged on a daily basis for the outstanding amount.The good news is that you don't have to pay any interest if you pay credit card bills in full before the due date.īut if you're unable to pay your credit card bill, you need to know that: So while credit cards are convenient for cashless payment of goods and services, they should not be used as a long-term credit facility. Outstanding balance incurs high interest charges if it's not paid back in full.If you have a credit card, you probably know how useful it can be, so much so that we often forget: Interest is charged on the balance if you don't pay in full and choose to pay only the minimum amount due in your monthly statement. The outstanding balance represents what you owe. The longer you owe the bank, the more interest you'll have to payĪ credit card allows you to charge up to the credit limit set on the card.If you pay your credit card bill in full and on time, you won't get charged interest.Unpaid credit card debt can snowball out of control.
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