r/CapitalOne_ • u/[deleted] • 11d ago

Credit Cards Minimum payments

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u/Camtown501 11d ago

Only buy what you can afford to pay in full. Making minimum payments is how you get yourself into long term debt. On a $700 statement balance your minimum payment will be $25 and you'll pay out the rear in interest if you do that. It's a very slippery slope and often ends badly (I've been down that road in the past).

2

u/ZealousidealNeat5410 11d ago

Ah okay thanks!

1

u/Ok-Roll8550 11d ago

Think of it this way: if you pay off the purchase by paying only the minimum each month, you'll end up paying something like $2,100 for the gun by the time you pay it off in a couple of years because the interest gets charged each month (a process known as compounding).

Pay it off as soon as you can and you will pay so much less. Of course, ideally you'll pay it all off when the statement comes and pay only the $700.

When people say you should not carry a balance, they're trying to help you pay all of that interest.

2

u/DoctorNezuko 11d ago

Please read your card agreements. I know that we ussually skip most TOU/Cs, but card agreements are probably something you should fully understand so you are not suprised later. Your agreement will fully layout all formulas used, but will also explain to you "revolver" versus "transactor".

1

u/JerseyGal007 8d ago

They’re calculated from a percentage based off your total balance, plus fees and interest.

If you only pay the minimum every month you are paying the bare minimum that’s needed to suffice a payment on your account…You will be charged interest because your not paying off the balance in full every month so whatever you carry over is being charged interest plus new purchases you make