Paying Off Credit Card Debt
Paying off Credit Card Debt with Minimum Payments
Credit card minimum payments may seem convenient on the surface, but only making the minimum payment each month can be quite costly and, it can take you several years to finally get your credit card paid off.
Lets say you have a $10,000.00 balance on a credit card with a 17.500% APR. If your minimum payment is $300.00 and that is all you pay each month, it will take you 18 year(s) and 5 month(s) to finally get that card paid off (assuming you dont add anymore debt to the balance). You will have also paid $6,051.82 in interest alone.
If you send a fixed $350.00 payment, on the other hand, this extra money will make it possible for you to pay off that same balance in just 3 year(s) and 2 month(s) that is 15 year(s) and 3 month(s) sooner than if you paid just the minimum payment. You will also only pay $3,030.01 in interest, saving you $6,051.82.
DISCLAIMER: There is NO WARRANTY, expressed or implied, for the accuracy of this information or it's applicability to your financial situation. Please consult your own financial advisor.
How Can I Payoff My Credit Card Debt Sooner?
If you are in credit card debt, you might be interested in setting a goal to have that card paid off by a certain time. In order to reach that goal, however, you need to know how much money you have to send each month in order to have the card paid off by that date.
If you have a credit card balance of $10,000.00 on a card with a 17.500% APR, you might have a minimum payment set by the credit card of $250.00. At this rate, it will take you 5 year(s) and 1 month(s) to pay off the card. If you have a goal of paying off that card in 24 month(s), however, you will need to increase your payment amount to $496.83. Not only will this knock off 3 year(s) and 1 month(s), you will also save $3,326.12 by reducing the amount of interest you have to pay on the balance.
DISCLAIMER: There is NO WARRANTY, expressed or implied, for the accuracy of this information or it's applicability to your financial situation. Please consult your own financial advisor.