Maxing Out on the Minimum: Don’t Get Trapped Making Minimum Credit Card PaymentsWritten by Elizabeth Walling
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However, most people have far more than $1,000 in credit card debt. Let’s try more realistic balance of $5,000. Paying minimum payment on this balance with an interest rate of 18% will result in a total payoff in approximately 35 years. In that time, you will have paid almost $13,000 in interest charges alone.
These numbers can be frightening, but there is something you can do. You don’t have to pay much more than minimum to start seeing big changes in your balance. Let’s try these numbers again, this time paying slightly more than minimum payment.
On $1,000 balance at 18% interest, try paying $30 per month instead of minimum of $20. Now you will only be paying on this balance for less than four years and you will pay less than $400 in interest charges.
On $5,000 balance at 18% interest, bump payment up to $125 per month. At this rate, you will pay off your balance in about five years, and you will pay approximately $2,500 in interest charges. You could save over $10,000!
As you can see, paying minimum payment might seem more affordable at first, but in long run, you will pay dearly for it in interest charges. Just increasing your payment by a little will make a big difference. The more you increase your payment, less time and money you will spend trying to pay off your credit card debt. Do yourself a favor and don’t fall into trap of making minimum credit card payments.
For more information on Debt Consolidation Loans and Credit Repair Tips, please visit us at Helpful Home Ideas.
Johann Erickson is the owner of Online Discount Mart and TV Products 4 Less. Please include an active link to our site if you'd like to reprint this article. He is also a contributing writer for sites such as Helpful Home Ideas
| | How to Handle and Avoid Credit Card DebtWritten by By Laurel Fisher
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Many companies offer debt consolidation loans; if you have a lot of debt on several different cards, debt consolidation may be a good option for you. Other types of debt, including medical bills, can be consolidated at same time. If nothing else, consolidation makes paying back debts easier, since you have fewer checks to write each month and less chance of forgetting to pay. Even better, most people are able to lower their combined monthly payment and APR by consolidating. Just make sure you pay back as much as possible every month, even if you are not required to pay as much as before. And do not rush into consolidation; take your time looking for best deal.
Credit card debt is not end of world, but if it is not handled responsibly, credit card debt can be end of your financial security. For more Credit Repair Tips, please visit us at Helpful Home Ideas.
Johann Erickson is the owner of Online Discount Mart and TV Products 4 Less. Please include an active link to our site if you'd like to reprint this article. He is also a contributing writer for sites such as Helpful Home Ideas
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