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Minimum Payment Trap On Credit Cards | GEM Debt Law

Credit cards are one of the ways people start building credit.  They are a wonderful tool necessary to function in our online economy.  Not having one makes it almost impossible to travel or buy things online or any number of other activities.  Also, building a good credit score is one of the best ways to get approved for more credit, loans, and mortgages when you need it. As having bad credit will seriously limit your ability to meet your financial goals, it is critical then that you use your credit cards responsibly, and not get caught in what is known as the Minimum Payment Trap

What is the minimum payment trap? 

Credit cards are a way for credit card companies to make money from interests off the money you’re using. When using your credit card you are required to pay it back in a timely manner. If you don’t have the full amount that you borrowed, you can choose to make a minimum payment. This is where the credit card companies come in and charge you interest on the outstanding balance left on the card. The interest rate charged by the credit card companies can often be extremely high, often as much as 30% or even more!  You have the option often to make small minimum payments. Doing only minimum payments will rapidly accumulate debt in your account due to the monthly interest charges on the amount you owe. It will often take DECADES to pay off your credit card if you only make minimum payments!


Not being able to pay back the money you’re bowering will affect your future financial and personal life as well. It’s important to know how minimum payments only will affect you and your future. See the consequences below: 

Decrease in your credit score 

We depend on our credit score. If you carry a large amount of debt, your score will negatively be affected. A low credit score won’t allow you to get approved for anymore credit cards, loans, and it will show lenders that they can’t trust you with their money.

Won’t afford to pay bills fully

When you look at your bills and see the minimum payment option, yes, it sounds tempting because it’s a smaller amount and you get trapped in only paying that making it hard to decrease your debt. This will lead to not being able to afford to pay bills fully for years. 

It takes time to get out of debt

Your credit card statement comes with a timed payments chart to illustrate how long it will take for you to become debt-free. Depending on the amount of debt on your credit card, it can take years to become debt-free. Look at your statement and see for yourself if starting to pay off debt is a good idea.

Avoid the minimum payment trap

There are no tricks to avoiding the minimum payment trap. You must pay your credit card statement in full every month in order to avoid building it up. Avoid spending more than you can afford. The best tip we can share is to make sure that you have that cash money in your bank to be able to pay the amount borrowed.

Can’t find a way to get back on the right track? We can provide help and advice on how to increase those payments, build up your credit, and get you back on the right track. Call us today at 1866.570.9988 or email [email protected] or fill out our website contact form.

We’re happy to help!

GEM Debt Law


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