Well, if you are a banker, they are great! Consider though, that paying minimum payments and being satisfied with that staus quo, is precisely where the banks want you to be, stuck. Stuck, and stuck good. Take a look at the following figures, you may find them surprising. I find them SHOCKING!

• $1000 balance, 18% interest, minimum payment $100 = 11 months to payoff
• $1000 balance, 18% interest, minimum payment $50 = 24 months to payoff
• $2000 balance, 18% interest, minimum payment $100 = 24 months to payoff
• $2000 balance, 18% interest, minimum payment $50 = 62 months to payoff
• $3000 balance, 18% interest, minimum payment $150 = 24 months to payoff
• $3000 balance, 18% interest, minimum payment $100 = 40 months to payoff
• $4000 balance, 18% interest, minimum payment $200 = 24 months to payoff
• $4000 balance, 18% interest, minimum payment $150 = 34 months to payoff
• $5000 balance, 18% interest, minimum payment $200 = 32 months to payoff
• $5000 balance, 18% interest, minimum payment $150 = 47 months to payoff
• $5000 balance, 18% interest, minimum payment $100 = 93 months to payoff

Notice any pattern here? Incredible! You betcha! Unconscionable? I should think so, yet these minimum payment problems (bankers benefits) are all too common (yet are accepted and encouraged)  in today’s credit driven society. And, take a look, these figures are without add on fees for overage charges, over limit fees, excess credit increases in interest rate, and never mind not using the card to charge anything more. This is based on the current outstanding balance. In these examples, your stuck, stuck for at least a year,  and in one projection almost 8 years of minimum payments.

Then, multiply this mathematics, over, say 5 credit cards at $2000, now totaling $10,000. Not that far off from reality. Even if you were paying $500 per month on all of those cards combined, it would take 2 years to reach a $0 balance. If you only paid a total of $250 on this same balance, the $0 balance would not come for 5 years!

So, what can you do. Well for starters, in answering the title question: minimum payments on your credit cards is NOT OK. If one is seriously going to break the cycle of being stuck with seemingly never ending minimum payments, a concerted effort to pay a much higher monthly amount is required, to pay down the balance to$0. Thereafter, keeping the cards at $0 each month, should be maintained.

Failing that, if you are stuck, with no feasible way out, a bankruptcy should certainly be considered. There may be other options, as well, but included in the very viable and successful options to break the cycle, a bankruptcy properly prepared by an attorney can be beneficial.

John C. Colwell, San Diego BankruptcyAttorney

Debt Relief Legal Clinic, San Diego, CA
www.debtclinic.com
Facebook Fan page
http://www.facebook.com/pages/San-Diego-CA/Debt-Relief-Legal-Clinic/101118150043
Member, Board of Directors, NACBA
www.nacba.org