If we use appropriately a credit card instead of cash, we will gain various benefits, e.g. a 0% installment promotion or various discount benefits attached to that credit card or interest-free period for paying on time. But for those who use credit cards and like to pay at least 10%, let's see how does frequent minimum credit card payments affect us?

The interest calculation starts from the date of spending. If we choose to pay

minimum on credit card, 2 interest amounts will be charged. The first amount will be charged from the spending balance from the first day until the due date and the second amount is the interest on the balance after the minimum payment from the date we pay the minimum until the closing date of next month. If we regularly pay the minimum, of course, interest rates must continue to rise undeniably. Interest is charged from the date the minimum payment is made, but actually interest starts on the day we spend it.

No interest-free period.

Usually, credit card providers offer interest-free periods to their card holders from the first day of spending until the payment due date. If we plan to prepare money for full amount payment, we will benefit from this period. It is a credit usage instead of cash which helps to increase liquidity without paying interest. But if we choose to pay the minimum credit card, the right to use the interest-free period will expire immediately. And we have to pay interest from the first day of spending which will cause the interest in that accounting period to increase.

Longer installments, higher interest rate.

Once we choose paying the minimum credit card, Of course, we will have a longer debt because the principal that was spent firstly cannot be cleared completely as scheduled which resulted in an increase in interest. And if we continue to use credit cards with the minimum pay on credit card every month, the amount of debt and interest will increase until it becomes a large debt. It causes a longer debt to pay off and the chances of getting out of the debt cycle will be even more difficult.

Signs of over-indebtedness.

The minimum monthly credit card payment is one of the warning signs that we are not able to manage expenses as planned. That points out that we have more expenses than we earn, so we should stop using credit cards first to clear up less debt. But if we continue to use the card and pay the minimum, the interest will increase which incur an excess debt. Finally, even the minimum payment becomes more difficult, spoil the credit and may have to pay more interest and various fines, affecting daily life.

After spending via credit card every month, it is important that we plan to pay back the full amount when the payment is due in order to get the most benefits of the credit card usage and does not create any future spending problems. For anyone who wants to know how to spend with their own credit card each month. You can access the Just for you function in the SCB EASY App to check your monthly spending. It is classified by credit card category. This will help us to see the spending and plan the use of credit cards effectively. For more interesting information, please click

https://www.scb.co.th/th/personal-banking/digital-banking/scb-easy/just-for-you-info.html