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Credit Card Help: How to Use a Credit Card Effectively

Pay the Balance off Monthly

While it may be enticing to use a credit card to buy things that you can't afford at the moment, it is not a wise thing to do. If you do purchase anything using a credit card, make sure to pay off the ENTIRE balance each month. Just paying the monthly payment or part of the balance will just let the balance grow and grow each month. In fact, just paying the monthly payment will not result in your credit card being paid off for years. For example:

Credit Card Debt Total: $1,000

APR: 18%

Monthly Payment: $25

If you just pay the minimum payment it will result in the following:

Time to Pay Off: 11 years

Interest Paid: $1,115.41

The interest paid would be more than the original credit card debt total.

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