The RIGHT Way to Pay Off a Credit Card

April 25, 2025

Debt

The RIGHT Way to Pay Off a Credit Card


A credit card won't ruin your life.

But not paying it off?

That just might.


Let's talk about the two ways to pay off your credit card and why only one of them actually makes sense.

The RIGHT Way to Pay Off a Credit Card

Two Ways to Pay Off a Credit Card


Option 1: Pay in Full

Option 2: Minimum Monthly Payments


That's it. Those are the two options credit card companies give you. One helps you win. The other keeps you broke.


OPTION 1: Pay in Full


The right way.


  • You owe no interest
  • You stay in control
  • You use the card as a tool, not a trap
  • You're never behind and never stressed

    • If you pay your full balance before the due date, the credit card company doesn't charge you anything extra. You win. Simple as that.


    OPTION 2: Minimum Payment


    The wrong way


  • You get charged interest (more on that in a second)
  • It stretches your balance out for years
  • You end up paying way more than you spent
  • You stay stuck in debt

    • Let's be clear: Minimum payments are not your friend. They're the company's way of keeping you around AND charging you every step of the way.


    Wait… What Is Interest?


    Interest is the cost of borrowing money.


    If you don't pay off your balance in full, the credit card company charges you for letting that balance sit there.


    Most credit cards charge 20–30% interest.


    Let's say you spend $1,000 and only pay the $50 minimum, you're getting charged interest on the $950 you didn't pay.


    That's how small balances turn into big problems.


    Can't Pay in Full? Here's What to Do:


    If you can't pay the full amount right now, that's okay...but don't settle for just the minimum.


    Pay as much as you possibly can.

    Every extra dollar you throw at your balance saves you money in interest and gets you out of debt faster.


    What About Cash Back & Rewards?


    Rewards are great... but only if you never carry a balance.


    Credit card companies give you points and miles because they know most people will end up paying interest.


    You get 2% cash back

    They charge you 26% in interest.

    They win. You lose. (Don't be a loser).


    You only come out ahead if you pay your card off every single month.


    If not, that "free flight" probably cost you hundreds if not thousands of dollars.


    Final Thoughts


  • Pay your card in full. Always.
  • If you can't, pay as much as you can.
  • Don't fall for the minimum payment trap.
  • Rewards are only a win if you're never paying interest.

    • Credit cards aren't evil. But they're not your friend either. They're a tool. And you've gotta be disciplined to use them the right way.


    If you're carrying a balance now, make a plan. Pay it down aggressively. Build an emergency fund. Stay in control of your money.


    Listen to our podcast about paying off credit cards here.


    Want to understand how credit scores work too? Check out our episode from two weeks ago.


    Follow @lockerroomfinance on Instagram.

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