Someone on a blogging board made the comment this morning that he has been trying to get through to his son about credit card use and how the son will get nowhere fast making only minimum payments on the balance.  Yes, I cringed at the thought of a young adult making only minimum payments and still using a credit card … mainly because I have been there and done that and had the credit report to prove it.  I blogged about how credit cards were my biggest money mistake when I was that age yesterday.

The thought has also occurred to me that if this person is making only the minimum payment while still using the credit card, he is not just spinning his wheels.  He is going BACKWARDS financially, digging himself deeper into the debt hole each and every month.

I remember last year before I had managed to get hubby to promise not to use the credit cards anymore.  We had made double the minimum payment that month, and hubby used the card to purchase a calling card while in Korea so he could call home and talk to me at zero-dark-stupid in the morning.  When we got the next month’s statement, the balance had actually gone UP.  We had paid about $60 on the balance, and the calling card hubby bought was under $25.  It was the interest and the “currency exchange fee” that made us go backwards.  If we had only made the minimum payment, we would have gone much further in the hole than just $5, but that was enough to get hubby good and mad.  In fact, that was what finally convinced hubby to stop using the credit cards.  (Name and shame: it was American Express Blue card.)

Those of y’all who still have credit cards you are working to pay off:  break out the monthly statements!  I’m not asking for any figures to the penny (although you can be exact if you wish) I want to know about minimum payments versus interest charges.  How much actual principle are you paying when you only pay the minimum payment?  For the math nerds among us: how long will it take to pay off the balance if you ONLY pay minimum payments?

Maybe we can get this dad’s message delivered to his son in a way a young man will listen.  As the mom of a headstrong teenage boy, I know sometimes they will listen to others before they listen to parents.