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. [Read more →]
December 13, 2006 5 Comments