Listen to a Business English Dialogue About Minimum payment
Gabriel: Hi Abigail, have you ever considered the concept of minimum payments?
Abigail: Yes, Gabriel. Minimum payments are the smallest amount you’re required to pay each month on a credit card balance.
Gabriel: Exactly, Abigail. While minimum payments can help you avoid late fees, it’s important to understand that paying only the minimum can lead to accruing high-interest charges over time.
Abigail: That makes sense, Gabriel. So, how do credit card companies determine the minimum payment?
Gabriel: Well, Abigail, the minimum payment is typically calculated as a percentage of your total outstanding balance, usually around 1-3%, or a fixed dollar amount, whichever is higher.
Abigail: I see. Are there any consequences for not paying the minimum amount?
Gabriel: Yes, Abigail. Failing to make the minimum payment can result in late fees, penalty interest rates, and potentially damage to your credit score.
Abigail: That sounds serious. Is there a way to avoid paying high-interest charges?
Gabriel: Absolutely, Abigail. To avoid accruing high-interest charges, it’s best to pay more than the minimum amount each month or ideally, pay off the entire balance in full.
Abigail: Thanks for the advice, Gabriel. It’s important to stay on top of credit card payments to avoid unnecessary fees and interest charges.
Gabriel: You’re welcome, Abigail. Responsible credit card management is key to maintaining good financial health and avoiding debt traps.