One of the first steps to getting your finances back on track is reducing your credit card debt by paying off your credit cards. However, many consumers only make the minimum payment on their card each month. When people pay for things with credit cards, it can sometimes feel like they're not spending "real" money. Paying only the minimum amount due can have a serious impact on your finances, credit score and ability to get additional credit in the future. Here are three reasons why paying the minimum amount due is not a smart financial move:

1. Negative Impact to Your Credit Score

factors that affect credit scores One of the factors used to calculate your credit score is the percentage of your available credit that you have used. A full 30 percent of your credit score is calculated based on the amount owed. By paying only the minimum, you often will owe more in interest for the month that you pay, which will increase your utilization percentage even if you do not use the card. If you have a credit card with a $10,000 limit and you owe $3,500 then you have 35 percent utilization, which will reduce your score. Any credit utilization percentage over 30% will hurt your score.

2. Extended Time to Become Debt Free

use credit cards less for better scores If you only pay the minimum amount each month, even if you do not make additional charges, it will take an extended time to pay off the card. If your utilization score is affecting your credit score, then this length of time will cost you additional money in higher interest for other credit. You can also lose other opportunities where credit score is factored, including employment or rental application acceptance.

3. Paying High Amount of Interest

interest costs on credit card debt If you pay off your credit card by only paying the minimum payment each month, you will have paid a lot more total costs than if you had made larger payments throughout the life of the debt.