If you're carrying a high balance on your credit cards but your finances are stretched thin, making
each month can provide some much-needed breathing room in your budget.
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making → carry → budget
Rather than having to pay off the entire card balance at once, you only have to cover a fraction of what you owe to keep the account current on a monthly basis.
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you → have → basis
But when other expenses are competing for the same limited funds, even that smaller monthly obligation can become difficult to fit into the budget.
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obligation → compete → budget
And that's an issue more cardholders may be confronting right now, as
, card rates are ticking upward and high interest charges are making carrying this type of debt expensive.
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carrying → confront → debt
When there's only so much money available to cover housing, groceries, utilities and other necessities, can become a real possibility — even if you're still able to send the issuer some of what you owe.
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you → be → what
In that situation, paying $150 toward a $200 minimum may seem like a reasonable way to show that you're making an effort while buying yourself some extra time.
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you → pay → time
Credit card payments don't necessarily work that way, though.
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payments → work → ?
So what happens if you pay less than the minimum that's owed on your credit card?
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that → happen → card
That's what we'll examine below.
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we → examine → what
What happens if you pay less than the minimum on your credit card?
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you → happen → card
In order for a credit card payment to be considered on time, you must pay at least the minimum amount due by the deadline.
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you → consider → deadline
If you pay less than the minimum,
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you → pay → minimum
, and the card issuer may charge a late fee in return.
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issuer → charge → return
For example, sending $190 when your statement says you owe a $200 minimum doesn't typically satisfy your payment obligation.
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you → send → obligation
When that happens, it can make an already difficult situation more expensive.
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situation → happen → ?
Not only will
on the unpaid balance, but that late fee will add to what you owe.
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you → add → what
And, depending on the terms of your card agreement and payment history, missing the required minimum could also cause you to lose a promotional APR or on new purchases.
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you → depend → purchases
Your credit could eventually be affected, too.
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credit → affect → ?
A payment that's just a few days late isn't generally reported immediately to the credit bureaus, but if the account remains unpaid long enough to become 30 days past due,
.
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account → report → bureaus
That can damage your credit score and make borrowing more difficult or expensive in the future.
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borrowing → damage → future
Making a partial payment doesn't reset that clock, either.
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Making → make → clock
If you owe a $300 minimum payment and pay only $100, for example, you haven't satisfied the required payment simply because the issuer accepted the money.
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issuer → owe → money
You would generally need to bring the account current according to the issuer's requirements to avoid the delinquency progressing further.
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delinquency → need → requirements
The situation can become even more serious if you continue falling behind.
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you → become → ?
Additional missed payments — whether they're due to partial payments or full missed payments — can lead to further credit damage, account closure, and, eventually,
.
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they → miss → damage
So, while paying what you can may reduce your balance slightly, it shouldn't be confused with making the required minimum payment.
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it → pay → payment
What can you do if you can't afford the minimum payment?
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you → do → payment
If paying less than the minimum is becoming a regular necessity rather than a one-time issue, it may be time to look beyond partial payments.
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it → pay → payments
The goal at that point should be to
before the account falls further behind.
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account → fall → point
One option is to contact your card issuer as soon as you realize you're struggling.
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you → contact → issuer
that can temporarily lower your interest rate, reduce your monthly payment or otherwise modify your account terms.
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that → lower → terms
So, if you find yourself unable to make even the minimum payment, contact your card company immediately and explain the situation, as there may be help available.
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yourself → find → situation
If the problem extends across several credit cards or is likely to be a longer-term issue,
may also be worth exploring.
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problem → extend → cards
Or, offered through a credit counseling agency could provide another way to restructure payments and potentially reduce interest costs.may
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offered → offer → payments
also be an option, particularly for borrowers who are facing and can't realistically repay their unsecured debts in full.
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who → face → debts
With this approach, the goal is to negotiate with creditors to agree on a settlement that's less than what's currently owed.
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what → negotiate → settlement
But settlement can have , and creditors aren't required to agree to accept a lower amount, so it's important to understand the costs and risks before enrolling.
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it → have → costs
Whatever route you consider, though, acting early can give you more options.
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acting → consider → options
Waiting until several payments have been missed can leave you dealing with a larger balance, more serious delinquency and fewer straightforward ways to regain control.
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payments → wait → control
The bottom line
Paying part of your credit card minimum may reduce the amount you owe, but it generally won't count as making the required monthly payment.
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it → pay → payment
…and 3 more, not listed.
The Aporia
