National Bank of Serbia warns of revolving credit card debt traps

Financial experts and the National Bank of Serbia are warning consumers about the risks associated with revolving credit cards, specifically the trap of making only minimum monthly payments.

When a user only pays the minimum required amount, a significant portion of the payment is applied toward interest and fees rather than the principal debt. This can result in a cycle where the actual debt decreases very slowly, potentially leading to years of repayment and total interest costs that exceed the original amount borrowed.

To avoid long-term debt, experts recommend paying the full balance every month to avoid interest charges, making more frequent payments to reduce the daily interest base, and setting up automatic payments to prevent late fees and credit rating damage.