Some time ago we discussed three types of credit card payments: full payment every month, paying with minimum payment, and not paying at all / in arrears. This time we will discuss more deeply about payments with minimum payment, including the definition is a definition, an illustration of payment of a credit card bill with a minimum payment, up to the steps that should be done if you have already paid the bill with a minimum payment.
10% of the total arrears + that bills are still not paid off in the previous month (if any). This type of payment is a favorite option especially for those who are afraid to enter BI’s blacklist. However, is it true that paying a credit card bill with minimum payment is the right choice? Let’s see more.
Paying bills with a minimum payment is often used as an option if the credit card holders. This is not without reason, the option to pay bills with a minimum payment is popular because of course the card owner does not need to make a full payment, and can still allocate the remaining money to make other bill payments. This condition is taken when the card owner is not able to pay directly in full, but does not want his name listed on the blacklist.
Yes, even if you do not make a full payment, you do not need to worry about your good name. The bank will still assume that your payment is smooth because there are no arrears at all. This means, credit card owners will avoid the threat of IDI Historical blacklist, which will make it difficult to apply for loans again in the future.
But really, paying bills with a minimum payment is not the best way because it will not make you free of debt at all. Why so? The following is an illustration of the payment of the minimum credit card payment, which can make you see first hand how the payment has affected the repayment of your credit card debt:
Irwan Ibrahim, Director of Customer Solutions, Tita Flor International Indonesia, illustrated a credit card repayment with a minimum payment to show the effectiveness of paying credit card bills with minimum payments to pay off all bills. In this process the card owner is conditioned not to use his credit card again, and tries to continue paying off until the remaining arrears are used up. The following is an illustration of credit card repayment with minimum payment:
We can see that the debt can only be repaid with a minimum payment in the 67th month or after 5.5 years. Just imagine if you become Adi, it means you have to survive without using a credit card at all to pay off the remaining bills. Even if in fact, Adi makes regular payments and can use a credit card to the maximum, Adi can use it for other useful promotions to shop cheaper. Too bad if the credit card is not used at all and is only used to pay the remaining arrears? More complete, you can also check the credit card repayment simulation with minimum payment or click the picture at the end of this article.
After seeing from the illustration of the minimum payment bill made by Adi above, you can see that actually Adi as the owner of the credit card is just hoarding debt without completing it at all. Adi still can not avoid the interest that continues to run behind the payment of credit card bills with minimum payment. Therefore, this course only makes it longer pay off debt. In Adi’s case, with a debt of 50 million, it could only be repaid 5.5 years later.
Cases like this can happen as well as you. Based on what is experienced by Adi, you as a card owner must continually pay credit card bills with minimum payment for years if you want to pay it off. Not to mention, when you want to focus on paying off your credit card bills with minimum payment, you also can not use the credit card for attractive promos that should be able to give it to profit. The more cards are used, then it will only burden you to pay off the remaining debt that is still running.
If you have already paid the minimum payment of a credit card, there are a number of steps you can take to overcome it: