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Why should you avoid paying the minimum amount due on credit cards?

Credit cards are becoming increasingly popular, particularly among young professionals.

The minimum amount due (MAD) is the least amount that must be made on or before the payment due date in order to avoid incurring late penalties.


MAD is typically set at 5% of the total sum owing as determined on the day the credit card statement is produced.


Regularly paying only the minimal amount due without monitoring spending can lead to credit card debt and a vicious debt trap.


Making minimal payments may lead to high interest charges and difficulty obtaining loans in the future.


Paying only the minimum amount due each month will keep the credit card active but there won’t be any interest-free period or reduced balance.


This agreement should only be used temporarily in case of financial emergency or cash flow difficulty.

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The minimum amount due on a credit card is the least amount that must be made on or before the payment due date in order to avoid incurring late penalties. Read below as we discuss the consequences of paying only the minimum amount due on your credit card.

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Why should you avoid paying the minimum amount due on credit cards?

The minimum amount due on a credit card is the least amount that must be made on or before the payment due date in order to avoid incurring late penalties. Read below as we discuss the consequences of paying only the minimum amount due on your credit card.

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