When aiming to pay off a credit card in 3 years, what should the client pay monthly if the minimum balance is insufficient?

To determine the appropriate monthly payment for paying off a credit card in three years effectively, one must consider the total balance of the credit card, the interest rate, and the desired time frame for repayment.

In the context of this question, if the goal is to pay off the balance in three years, the average monthly payment must cover not only the principal amount owed but also any accruing interest. Simply paying the minimum balance often falls short of achieving this goal, as minimum payments are typically calculated based on a small percentage of the total balance or a fixed amount, which can extend the repayment period significantly.

Choosing a higher payment amount, like the one indicated in the correct answer, ensures that the debt is amortized properly over the designated time frame. In this situation, $70 would likely be calculated based on a more detailed evaluation of the remaining balance and interest rate to ensure the total amount is cleared within the three-year timeframe. Paying this amount consistently each month would help to reduce the principal more rapidly, decrease the total interest paid over the term, and ultimately lead to successful debt repayment within the intended period.

Understanding this financial strategy assists clients in managing their debts effectively, leading to more favorable financial outcomes.