Are minimum credit card payments really affordable?
Credit card payment plans fall into the discussions of personal finance basics, but it’s worth a reminder from time to time as to how they work.
Jason Cabler has a piece at Celebrating Financial Freedom called Are Minimum Credit Card Payments Really Affordable?
He does the math on one example, and many credit card bills now include payment charts with various payment plans, but here’s a snippet that gets to his point:
You have to get away from the “how much is the payment?” mindset and start asking “how much is this going to cost me?”. When you start realizing just how much credit costs you and the lengths that the credit card companies will go to in order to keep you in perpetual debt, you’ll start running away from them faster than Usain Bolt running the 100 meters.
Remember, using cash is always the best deal out there and being debt free is the best financial plan that will ensure that you perpetually succeed with money.
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February 4th, 2013
Drilled into our heads as young children by Dad: if you can’t afford to pay the bill in full when it comes in, you don’t buy it! Exception would be an emergency tire repair situation on a highway. No recreational shopping done on weekends at the Mall either. I have only ever split a CC over 2 months, done intentionally, as it was for really large bills: new kitchen appliances, and new cabinets. I factored the finance charge into my overall budget as a cost.