41% of cardholders exhibit poor credit habits
The article discusses the risks of only paying the minimum amount due on credit cards in the United States, a habit followed by over 41% of cardholders, especially among Generation Z (58%). The study explains that paying only the minimum mostly covers interest payments, which prolongs the repayment period and increases financial burden. For example, it can take approximately 27 years to pay off an average debt of $7,756 with interest reaching up to $13,000 at an annual percentage rate of 20.94%. Experts recommend attempting to pay off the full balance each month and reducing reliance on the minimum to lower costs. They also emphasize the importance of avoiding late payments, as they harm credit scores, lead to fines, and cause creditworthiness to decline. Using automatic payment services is advised to prevent forgetting payments.
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