If You Pay the Minimum Payment Is There Interest?

Yes, there is in fact a lot of interest if you pay only the minimum payment. Making a minimum payment is quite possibly the worst possible thing you can do with regards to credit card debt. By paying only the minimum payment you are paying the most interest possible. A majority of your payment is being applied to interest while a very small percentage is being applied to the principal amount. Numbers and percentages can vary greatly but often times 60%, 70% of your payment (or more) is being applied to interest with the smaller remaining amount being applied to principal.

Maximum Interest

Making only minimum payments is a surefire way to pay the most interest possible with regards to your credit card debt. It leads to vicious cycle of revolving credit card debt and puts many consumers in a financial bind. Interest payments can be detrimental to your financial health in the long term and can severely delay your ability to retire and live financially free.

Why Are Minimums So Bad?

Credit card minimums were setup to be amortized like long term lending options. Due to this, if you only make minimum payments on your current statement balance it could take you decades to fully pay down your accounts. This is why making a minimum payment makes it so much more difficult to get out of debt. So yes, there is interest if you only make minimums payments and there’s a lot of it.

There's Always Hope

If you're carrying excessive credit card debt the last thing you want to do is stop paying your credit cards and stop worrying about it. If it feels like there's no way out, try to put a plan in place. Although there are alternative options which could help you save more money by stopping payments, you won't want to go down that route unless you first have a plan in place. If you think things are unmanageable then you could potentially look at those options.