r minimum payment on time. Kim was out for lunch one day with a business client when her credit world started to unravel: her card was refused. Kim got back to her office and called the credit card company. She was told that she exceeded her credit limit of $2000.00. The credit card company explained to Kim the following: 1) her minimum payments covered only finance charges on her existing balance 2) in the fourth month, they received her payment two daysDoes your credit card balance never seem to go down? Do you wonder where your minimum payments go each month? Has your interest rate increased without your knowledge? Does your credit card statement have charges you don't understand? You're not alone! Many people find themselves making their minimum credit card payments each month discovering at the end of the year that their balance is almost the same as when they started.

How does it happen? Most credit card balances rise innocently enough. Once I worked with a woman who had this experience. She got a credit card intending to pay off the monthly balance. This plan worked to perfection for the first three months. At that time, Kim (not her real name), very prudently took advantage of an annual clothing sale. She used the sale to purchase much needed work clothes at 50% off. The final bill was a little over $1,500.00. Kim's intention was to pay off the balance two weeks later when she got her paycheck. However, two weeks later, when Kim got paid, she encountered another financial problem: her car needed $1,100.00 worth of repairs. The following day, Kim's credit card bill came in the mail. Kim had never paid much attention to her credit card bill prior to that and was relieved to see a box with the heading : minimum payment due. Kim had fully intended to pay the $1,000.00 that was on her credit card bill, but after paying cash for her car repairs, she didn't have the money left to pay off her credit card balance. Not wanting to hurt her credit rating, Kim immediately mailed the minimum payment.

When Kim received her next credit card bill, she realized that there was no decrease in the balance. She was not too concerned. Over the next few months, Kim would use her credit card and see her balance slowly increase even though she always sent in her minimum payment on time. Kim was out for lunch one day with a business client when her credit world started to unravel: her card was refused. Kim got back to her office and called the credit card company. She was told that she exceeded her credit limit of $2000.00. The credit card company explained to Kim the following: 1) her minimum payments covered only finance charges on her existing balance 2) in the fourth month, they received her payment two days

redit card balances rise innocently enough. Once I worked with a woman who had this experience. She got a credit card intending to pay off the monthly balance. This plan worked to perfection for the first three months. At that time, Kim (not her real name), very prudently took advantage of an annual clothing sale. She used the sale to purchase much needed work clothes at 50% off. The final bill was a little over $1,500.00. Kim's intention was to pay off the balance two weeks later when she got her paycheck. However, two weeks later, when Kim got paid, she encountered another financial problem: her car needed $1,100.00 worth of repairs. The following day, Kim's credit card bill came in the mail. Kim had never paid much attention to her credit card bill prior to that and was relieved to see a box with the heading : minimum payment due. Kim had fully intended to pay the $1,000.00 that was on her credit card bill, but after paying cash for her car repairs, she didn't have the money left to pay off her credit card balance. Not wanting to hurt her credit rating, Kim immediately mailed the minimum payment.

When Kim received her next credit card bill, she realized that there was no decrease in the balance. She was not too concerned. Over the next few months, Kim would use her credit card and see her balance slowly increase even though she always sent in her minimum payment on time. Kim was out for lunch one day with a business client when her credit world started to unravel: her card was refused. Kim got back to her office and called the credit card company. She was told that she exceeded her credit limit of $2000.00. The credit card company explained to Kim the following: 1) her minimum payments covered only finance charges on her existing balance 2) in the fourth month, they received her payment two days

f the balance two weeks later when she got her paycheck. However, two weeks later, when Kim got paid, she encountered another financial problem: her car needed $1,100.00 worth of repairs. The following day, Kim's credit card bill came in the mail. Kim had never paid much attention to her credit card bill prior to that and was relieved to see a box with the heading : minimum payment due. Kim had fully intended to pay the $1,000.00 that was on her credit card bill, but after paying cash for her car repairs, she didn't have the money left to pay off her credit card balance. Not wanting to hurt her credit rating, Kim immediately mailed the minimum payment.

When Kim received her next credit card bill, she realized that there was no decrease in the balance. She was not too concerned. Over the next few months, Kim would use her credit card and see her balance slowly increase even though she always sent in her minimum payment on time. Kim was out for lunch one day with a business client when her credit world started to unravel: her card was refused. Kim got back to her office and called the credit card company. She was told that she exceeded her credit limit of $2000.00. The credit card company explained to Kim the following: 1) her minimum payments covered only finance charges on her existing balance 2) in the fourth month, they received her payment two days

rd bill, but after paying cash for her car repairs, she didn't have the money left to pay off her credit card balance. Not wanting to hurt her credit rating, Kim immediately mailed the minimum payment.

When Kim received her next credit card bill, she realized that there was no decrease in the balance. She was not too concerned. Over the next few months, Kim would use her credit card and see her balance slowly increase even though she always sent in her minimum payment on time. Kim was out for lunch one day with a business client when her credit world started to unravel: her card was refused. Kim got back to her office and called the credit card company. She was told that she exceeded her credit limit of $2000.00. The credit card company explained to Kim the following: 1) her minimum payments covered only finance charges on her existing balance 2) in the fourth month, they received her payment two days

r minimum payment on time. Kim was out for lunch one day with a business client when her credit world started to unravel: her card was refused. Kim got back to her office and called the credit card company. She was told that she exceeded her credit limit of $2000.00. The credit card company explained to Kim the following: 1) her minimum payments covered only finance charges on her existing balance 2) in the fourth month, they received her payment two days late, which automatically kicked in a much higher interest rate. Kim learned these facts because she called her credit card company right away. At the critical moment of discovering her card was over the limit, Kim took took positive action to rectify the situation. She and her credit card company agreed on a workable payment schedule which zeroed out her credit card balance in twelve months. By communicating with her creditor, Kim did minimal damage to her credit score, and was able to build a strong financial future.

To prevent falling into the trap that Kim fell into, make sure you are fully aware of the terms and conditions of your credit card agreement. Financial institutions are required by law to fully disclose all terms and conditions that will increase your interest rates and/or assess late fees. Communicating payment problems as quickly as possible to your creditors will have a minimal effect on your credit history and greatly enhance your financial future.