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3 Reasons Why You Should Always Pay More Than the Minimum

3 Reasons Why You Should Always Pay More Than the Minimum

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Credit cards can be convenient financial tools for both individuals and businesses. You get purchasing power on the spot, and the creditor only requires you to pay off a small amount of the total each month.

However, carrying a balance and only paying the minimum amount due each month can lead to long-term financial pitfalls. It can cause trouble for your debt-to-income ratio, credit score and overall peace of mind.

Staying on top of your credit card payments is one of the best ways to stay financially well. In this article, we’ll explore three reasons why you should always strive to pay more than the minimum on your credit cards.

3 Reasons to Pay Your Credit Cards in Full

1. Minimize Accumulating Interest Charges

Perhaps the most significant drawback of paying only the minimum on your credit card is the mounting interest charges.

Credit cards typically come with high annual percentage rates (APRs), which can result in substantial interest costs over time.

By carrying a balance and making minimum payments, you’re essentially allowing interest to compound on the remaining amount. Over time, this can significantly inflate your total debt, making it challenging to pay off.

For example, suppose you have a credit card balance of $5,000 with an APR of 18% and a minimum monthly payment of 2% of the balance. If you only make minimum payments, it could take you years and thousands of dollars in interest to pay off the debt.

If you’re looking to consolidate debt or get away from high-interest rates, transferring your balance(s) to an Apple FCU Visa® Credit Card is a great way to minimize interest charges. Credit unions are regulated to never have credit card rates more than 18%, so you can be confident that your rate will never go above that threshold.

2. Improve Your Credit Score

It probably comes as no surprise that paying off your credit cards can improve your credit score, but most people don’t know how or why that is.

When determining your credit score, credit bureaus take your credit utilization ratio into consideration. Your credit utilization ratio is the amount of credit you’re using compared to your total available credit, and it accounts for approximately 30% of your credit score.

For example, let’s say you have two credit cards. Credit card no. 1 has a limit of $1,000 and a balance of $200. Credit card no. 2 has a limit of $3,000 and a balance of $800. Because your total credit utilization is $1,000 ($200 + $800) and your total credit limit is $4,000 ($1,000 + $3,000), your credit utilization ratio is 25%.

Maintaining a low credit utilization ratio is generally viewed favorably by credit bureaus, and experts say you should strive for a ratio of 30% or below. By paying more than the minimum and reducing your credit card balance, you lower your credit utilization ratio and positively impact your credit score.

A higher credit score not only enhances your financial credibility but also provides access to better loan terms, lower interest rates and higher credit limits in the future.

3. Achieve Financial Freedom and Peace of Mind

Carrying credit card debt can be a significant source of financial stress, limiting your ability to achieve long-term goals and enjoy peace of mind.

One of the top financial concerns for many Americans is tackling high-rate debt. Making more than the minimum payment allows you to pay off your credit card debt faster, freeing up financial resources for other priorities.

By eliminating credit card debt, you gain greater financial flexibility and control over your money. You can redirect funds towards building an emergency fund, investing in your future or pursuing meaningful experiences without the burden of lingering debt.



While credit cards offer convenience and rewards, it’s essential to understand the potential pitfalls of carrying a balance and only paying the minimum amount due.

Remember, proactive financial management is key to building a solid foundation for a secure and prosperous future. By prioritizing payments above the minimum, you can save on interest charges, improve your credit score and achieve greater financial freedom.

*APR = Annual Percentage Rate as of 01/01/2024 only available on balance transfers made with a variable rate Visa Credit Card, excluding the Educator, Student, Credit Builder, or Business Credit Card. The balance transfer APR offer is available 01/01/2024 - 03/31/2024 on balance transfers only. A 4.00% balance transfer fee during the promotional period applies. Balance transfer rates adjust to a variable APR (13.24%–18.00%) after the promotion period based on an evaluation of applicant credit; not all applicants will qualify for the lowest rate. The approved APR will apply for 12 months for every balance transfer completed within the promotional period from the first qualifying balance transfer. Existing Apple FCU Visa Credit Card and Loan balances are excluded from this promotional offer. The APR for purchases and cash advances will be disclosed at the time of credit approval. Balance Transfer promotional offers may not be used to pay down or pay off Apple FCU Loans/Credit Card balances.


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