What is the impact of paying only the minimum payment during the billing cycle?

Paying only the minimum payment during the billing cycle can have several impacts on your credit card account and financial situation. Here are some key points to consider:

1. Accrued Interest: If you only pay the minimum payment, the remaining balance on your credit card will accrue interest at the card's annual percentage rate (APR). This means you'll end up paying more in interest charges over time, potentially increasing the overall cost of your purchases.

2. Extended Repayment Time: By paying only the minimum payment, you're choosing to extend the repayment period for your credit card balance. This can result in carrying a balance for a longer time, potentially affecting your overall financial wellbeing.

3. Increased Total Debt: By only paying the minimum payment, you may not make significant progress in reducing your credit card debt. This can lead to an increase in your total debt load, which may impact your ability to manage other financial obligations.

4. Credit Utilization Ratio: Paying only the minimum payment can also impact your credit utilization ratio. If you have a high balance relative to your credit limit, your credit utilization ratio will remain high, which can negatively impact your credit score.

5. Lower Credit Score: Consistently making only the minimum payment can negatively affect your credit score over time. Creditors and credit scoring models may interpret this as an indicator of financial stress or an inability to manage credit responsibly.

It's generally advisable to pay more than the minimum payment whenever possible to minimize interest charges, reduce debt, and maintain a healthy credit profile. If you're struggling to make higher payments, consider reviewing your budget and exploring strategies to increase your income or reduce expenses to improve your financial situation.