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Rollover Option

Updated on October 4, 2023

The “rollover option” in credit cards refers to the ability to carry over a portion of your outstanding balance from one billing cycle to the next, instead of paying off the entire amount in full.

Understanding Rollover in detail

This feature allows you to make a minimum payment instead of settling the full balance by the due date. The minimum payment is the smallest amount you can pay by the due date to keep your credit card account in good standing. It usually includes a portion of the outstanding balance, interest charges, and fees. However, paying only the minimum amount often means you’re not making substantial progress in reducing your debt. It is also important to note that while the rollover option provides short-term flexibility, it can lead to additional costs in the form of interest charges. Credit card companies apply interest rates to the unpaid amount, and this accrues as your new balance for the next billing cycle. This interest is often much higher than rates for other types of loans. While the rollover option offers short-term relief by allowing you to postpone paying the full balance, it comes with significant long-term costs due to interest accumulation. Over time, this can lead to a cycle of debt if not managed carefully.