It’s not free money.
Growing up in Dubai, I saw the glitzy life money could afford. I didn’t have that life, but many people I knew did.
How did they do it?
On credit cards.
My Dad had a credit card too. However, he paid it off every month.
He claims he has never paid credit card interest.
I wish I could claim that too.
Interest Matters
When I migrated to the U.S. and got my first credit card, I got $300 credit.
I used it to make purchases and then got a statement saying the minimum payment was $20.
Wait! What?
I made the payment. I noticed that the balance hadn’t budged in the next month’s statement.
My payment of $20 had little to no effect on the outstanding balance, even though I didn’t make any additional purchases.
The awakening. It’s the interest dummy.
Believe it or not, that was the first time I understood how credit cards worked.
Well, I always knew there was interest involved.
What I didn’t know was that APRs are ridiculously high.
Best of Luck
If you make minimum payments on your credit card, you will NEVER be able to get out of credit card debt.
If you don’t use your credit card and make minimum payments, you will SOMEDAY be able to get out of debt.
You are living beyond your means if you can’t pay off your entire balance every month.
Don’t be like me. Be like my Dad.
Featured photo by Pawel Czerwinski on Unsplash
