Revolving Credit

You RASCAL!! You rolled your card bill to next month and slept soundly? Fetch the switch! Revolving credit lets you pay only a portion of this month's card bill and carry the remainder over. It feels like breathing room today, but the carried amount gathers high fees, making next month's burden heavier than this one's.

Why is it dangerous? First, the rate charged on carried balances tends to sit among the higher kinds of debt. Second, once the habit of paying only the minimum takes root, the principal barely shrinks while fees bloom every month. Third, its soothing name — 'lightening your payment' — makes you forget you are borrowing at all. Josam-mosa (朝三暮四): fooled into paying less at dawn and more at dusk — the monkeys of the old tale are not the only ones.

If you are already in the swamp, do this. Check whether the agreement was switched on without your notice; raise your payment ratio as high as you can bear so the principal actually falls; and stop stacking new spending on the card. Exact fee rates and terms differ by card company, so verify them through official guides. And if the balance has grown beyond your strength, do not suffer alone — seek your card company and public debt-counseling services.