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Making only the minimum payment
Making only the minimum payment | Rido/Shutterstock.com

Making only the minimum payment

The rationale: As long as you don't have to pay more, you'd rather save those extra bucks.

The rebuttal: By paying only the minimum on your credit card bill, you're incurring much higher finance charges and exponentially increasing the real cost of whatever you purchased.

CARD SEARCH: Compare zero percent APR credit cards on Bankrate.com.

Say you have a $4,000 balance on a card that requires a minimum payment of 2 percent, and your interest rate is 18 percent. It would take you 428 months (that's almost 36 years!) and $10,397.20 in interest to pay off that debt.

But if you added just $20 more to that minimum and committed to making fixed payments of $100 a month, the balance would be gone in 62 months and the interest shaved down to $2,154.49.

Bankrate's credit card calculator computes the payment schedule when you plug in your own real numbers.

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Editorial Disclaimer: The editorial content is not provided or commissioned by the credit card issuers. Opinions expressed here are author’s alone, not those of the credit card issuers, and have not been reviewed, approved or otherwise endorsed by the credit card issuers.

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