Entrepreneur and Finance Nerd Making Money Online

How Credit Card Debt Can Kill You

reducing credit card debt easily

Do you like your [tag]credit cards[/tag]? Do you use them for a lot of your [tag]spending[/tag]? Do you carry a [tag]balance[/tag] on your cards each month?

Let’s just start with some numbers to get our brains in gear. The average American has around $9,312 in credit card [tag]debt[/tag] (USA Today.)

It doesn’t take long to accumulate that. Some holiday shopping, a few nice restaurants and a family vacation will rack up the credit card debt quickly. Doesn’t seem like much?

Now what if we only pay the [tag]minimum payment[/tag]? The minimum payment on most cards is typically 2% of the total balance. That puts our starting payment right around $185 per month. Keep in mind that this amount will decline as the balance declines. For our calculations we’ll use an average credit card rate of 13%.

Alright, if we were to only pay the minimum payment on our credit card, we would pay the last bill 291 months from today. That’s 24 years and 3 months away! Our final [tag]interest[/tag] charge? $10,087.94. So our vacation just doubled in cost!

Now it really gets extreme if you have a high interest rate on your credit card. I’ve known several people who pay 18% interest or more. At 18% it will take just over 41 years to pay off! Thats a mind numbing 494 months away! On top of that the total interest charges soar to $25,263.76
Wow. Those numbers amaze me. However, at the same time they are very sobering. It’s sad how many people are [tag]hurting financially[/tag] and some don’t even know it. If you are in this group please take a look at Reducing Debt With A Snowball or contact me.

My number one purpose of this site is to help people see their financial situation and then show them how to escape and get to a place of [tag]financial freedom[/tag].

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5 Responses to “How Credit Card Debt Can Kill You”

  1. [...] The Carnival of Credit Card #1 is at Credit Card Lowdown. How Credit Card Debt Can Kill You stopped me in my tracks by reminding me how insidious credit card debt can be as it creeps up on you. [...]

  2. Steve B says:

    Unfortunately many people dont get so lucky as to be stuck with an interest rate of 13%. Many companies nowadays employ the universal default clause. Which makes it very easy for them to out of nowhere bump up your rate to 28% or higher. Paying the minimum then will have you in debt for literally thousands of months and paying back tens to hundreds of thousands of dollars in interest.

    [Reply]

  3. [...] Waller presents How Credit Card Debt Can Kill You posted at Simple Financial Advice – WallerBlog.com. Do you like your credit cards? Do you use them [...]

  4. tv brackets says:

    I have done some calculation, but explanation using illustration in this article is even more scary, so in a way you are helping others not to fall in to this sort of trouble.

    [Reply]

  5. Nowadays, it is possible to have an interest rate lower than 10%, but that is if one is worthy enough and if one is persistent in getting his/her desire.

    -Joanne

    [Reply]

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