What Happens If You Don’t Pay Off Your Credit Card Every Month?

Is it really the end of the world if you aren't paying off your credit card in full every month?

Many financial advisors suggest paying off credit card debt before you do anything else, including investing!

Let's break down the numbers in the video below. 

Let's say you have $10,000 of credit card debt at 20% APR...

Breaking this down, we can look at our monthly percentage rate, in this case, 1.67%  (we got here by taking our APR and dividing it by 12). 

By looking at the balance ($10,000) and multiplying it by our monthly interest rate (1.67%), we are looking at $167 a month to carry that balance.

You could make a large purchase with cash or credit, but what if you utilize both? 

You could make your purchase with a credit card and then you could invest that $10,000 cash... which could possibly earn up to $500 a month. 

You could then use that potential $500 to pay off the $167 monthly interest from your credit card purchase, and also have additional money to pay down the balance. 

With this method, you could possibly out earn the monthly interest rate and pay down the balance faster! 

You can ask yourself: 

1. Is it the end of the world if you don't pay it off every month, or is it just $167? 

2. Do you have an opportunity to potentially earn more than the $167 interest each month?

Want to learn more about potentially making your money go farther? Consider joining us here at Power Trades University.