The minimum repayment function of credit card reflects that banks have changed people's lifestyles and consumption habits. This function is deeply loved by young people because it can alleviate the current repayment pressure. But what if credit card is always used for minimum repayment?

1. Impact on credit score

For a period of time, if cardholders often choose the minimum repayment method when using credit cards, through the analysis of the banking system, they may think that the customer's recent financial situation is not good and there may be risks. Then, the banking system will lower the credit score, and then lower the credit rating, which is a size related to the credit rating.

In order to reduce risks, banks often adopt the method of reducing the credit limit. If the credit rating is low, they may even freeze the credit card limit of customers, making it impossible to use it.

2. Higher annualized interest

When choosing the lowest repayment method, the cardholder is not interest-free, but has to pay a fairly high interest fee. Because when the customer chooses the minimum repayment amount, the remaining money will be borne by the bank, and the interest expense is proportional to the time. The longer it takes, the higher the interest.

the selected minimum repayment method will bear interest from the day of consumption, with compound interest of five ten thousandths. Convert the annualized interest rate to a maximum of 18%.

3. Being caught in the predicament of excessive consumption

As a friend chooses "minimum repayment", the pressure during repayment period is reduced, and it is likely that he still thinks that he has sufficient funds, which leads to the situation of exceeding consumption and blindly consuming, and finally leads him into the quagmire of excessive consumption. It is also possible that some people choose to support loans with loans and even embark on the road of crime.