The Credit Trap. Minimum payment, maximum cost.

Credit card statements show a minimum due, often 5% of the balance. It feels responsible. But at 36% interest per year, most of what you pay is interest, not the amount you owe. The balance barely moves. The minimum payment is designed to keep you paying for as long as possible.

• A 50,000-rupee balance at 36% interest, with only minimum payments: over 30 years to clear, about 3 lakh paid.
• If you own a credit card, pay the full balance every month. Not the minimum.