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Many consumers get locked into the idea that if they can make their minimum payments, their credit card debt will remain manageable. This simply is not true. If a consumer is making new purchases every month and only making minimum payments, the debt will never go down, it just continues to grow. The increasing balance also keeps the finance charges growing as they are based on the mounting balance. This is why the credit card providers love consumers who make minimum monthly payments.
Here’s an example of the high cost minimum payments: If you charged $2000.00 on a card with an 18% interest rate and made a minimum payment of 2% of the balance, and didn’t make any additional charges, it would take about 30 years to pay off. Total cost of interest $5000.00. If the same card had a 4% minimum payment, the same debt would take about 10 years to pay off with a total interest charge of approximately $1100.00.
Don’t let your credit card provider keep you in a cycle of debt, never charge more on a credit card than you can pay off in 6 months to a year. Pay off one debt before you charge another.
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I must learn to pay as much as I can each month !