Here’s why Hi-Pay is a problem…
Hi-Rate isn’t always a problem on his own. In fact, if you manage debt carefully you can cut him out entirely. If you start a billing cycle with a zero balance and pay off charges in full at the end of the month, interest charges don’t apply. Hi-Rate only gets to eat when you carry balances from month to month that feed interest charges.
However, when Hi-Pay comes along, he makes it impossible to get rid of them. Credit cards are revolving debt. That means the monthly payments change based on your balance. When you overcharge, the payment requirement increases. Unfortunately, even though you pay more, interest still eats up the bulk of each payment.
So, as your balances increase, you spend more and more income but you don’t eliminate your debt. Instead, Hi-Rate and Hi-Pay just drain your funds and leave you financially exhausted. They’re why debt sucks.