To grasp what ‘credit card debt’ really means, we want to understand the workflow related to the employment of mastercards as such. Your ATM card is a representative of the credit account that you hold with the Visa card provider. Whatever payments you make using your ATM card are basically your debts that contribute towards your Visa card debt. So, you receive an once per month statement or your ATM card bill which shows your total Credit card debt.

You need to pay off your ATM card debt by the payment cutoff date failing which you may encounter late penaltiy and interest costs. However, you’ve got the option of making a partial ( minimum ) payment too, in which case you do not sustain late penaltiy but just the interest costs on your Visa card debt.

If you do not pay off your Mastercard debt in total the interest fees too get added to it. So your Visa card debt keeps on augmenting, more so as the rates on Credit card debt are usually higher than the rates on other sort of loans / debts. Further, the interest costs add on to your Mastercard debt every month to form the new balance or the new Credit card debt amount. If you keep making partial payments ( or no payments ) the interest charges are calculated anew on the new Visa card debt. Thus your Mastercard debt amasses quickly and shortly you find that what was a comparatively tiny card debt has swelled into an enormous amount which you find virtually impossible to pay.