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Most of that is just interest, so your principal never goes down. In fact, if you keep making minimum payments only, the balance rises until you hit the limit.

This is known as negative amortization, and it's not the way credit cards work. Or any loan where "most" of the payment is interest, for that matter. If you're paying any principal, you're paying down the loan. To my knowledge, credit card companies are required by law to set the minimum payment high enough that some principal is paid. Of course, it's only enough that you won't finish paying them off for twenty years, but it is amortization.




Are you sure? I've got a card with a very, very high balance and with minimum payments the balance due goes up every month by about $100.


Are you using it? :)

Seriously, I'm sure it depends on what country you're in, whether you're racking up late fees, etc., but I'm pretty sure that it's required in the US:

http://creditshout.com/credit-card-minimum-payments/ http://www.fdic.gov/news/news/financial/2003/FIL0302a.html#h...


Not using the card, its gone in the shredder after I maxed it out to pay for back surgery. But without a doubt the balance goes up every month. I'm not a computer with a PDF reader at the moment but my credit card statement shows that if I continue to pay the minimum every month it'll take over 2600 years to pay off and I would have paid over 2 million dollars in interest by the time its paid off. This is for a US card as well.


You should think about reporting them (maybe FTC and/or FDIC?) and also transferring your balance to another card.


Then let's clarify my hyperbole: if you make minimums, you're going to need a long long time to get out of the debt. Decades.

New laws and higher minimums are working to alleviate this problem, but if you can't make the minimum as it is, how will you do it when the minimum has doubled?




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