You pay your credit account bills every month, but do you know how the process works?

When you buy something with credit, a lender has “loaned” you the money, and every month you need to pay back some of it. If you pay the entire bill, you may not be charged interest.

It’s different if you only pay the minimum payment. A minimum payment is the lowest amount you can pay on your bill and remain in good standing with your lender.

It’s fine to do, but it may cost you more in the future. Why? If you only pay the minimum each month, you may have to pay interest on the remaining balance.

There are other options than paying in full or the minimum. If you can, try to pay a little more than the minimum or make two payments in a month. That’ll help pay off your bill faster, and you may have fewer finance charges and pay less overall.

It’s good to pay extra on your account, but it’ll only count toward that month’s bill. It doesn’t go toward minimum payments due on future bills. For example, if you pay twice your minimum monthly payment this month, you’ll still need to make your minimum monthly payment next month.