Wednesday, 30 January 2019

Reduce Credit Card Debt Yourself: What Nobody Is Talking About

Reduce Credit Card Debt Yourself: What Nobody Is Talking About

If you have a large amount of credit card debt and you are only making the minimum payment every month you're not going to pay it off any time soon.

Say for example you have $10,000 in credit card debt, credit card companies want you to return the money you borrowed from them. In order to pay off that $10,000 you need to return the money you owe to your credit card company

Every month you pay the minimum payment of $142, that payment lowers the total amount you've owed to $9,858. That's a little bit lower but not much, unfortunately, there are outside influences that can raise them with mainly being interest

Since you pay 17% interest, your total debt is now back to $9,999. 

Interest normally charges you around 17% of your outstanding balance at the end of every month

After 17% interest on your outstanding balance is charged, that brings your new debt amount to $9,999
After making a $142 payment, your bill has only been lowered by $1.
After one month you've paid your credit card company $142 but your total debt has only gone down by $1
Your minimum payment for month 2 is also $142
The next month if you still only make the same minimum payment of $142 your debt will be down to $9,857. But again there's that pesky interest sneaking up on you so after paying 17% interest again, your debt is back up to $9,998

That means after paying your credit card company $284, your total debt only went down by $2
One year later, after paying $1846, you will still owe $9995
After year making that same minimum payment every month you'll have paid your credit card company $1846 but you still owe $9995, that means it'll take you an entire year just to lower your debt by $5, and a year later you've only lowered what you owe your credit-card company by another $5

After 3 years:
$5254 paid
$9984 still owed

After 5 years:
$662 paid
$9968 still owed

After 10 years:
$17,182 paid
$9896 still owed

After 15 years:
$25,702 paid
$9728 still owed

After 25 years:
$42,742 paid
$8422 still owed

Read: Debt Consolidation - How To Get Rid Of Credit Card Debt Fast

Eventually, you see that if you took action to lower your debt, the money you're paying the credit card company could go towards the thing that you'd much rather have. like a used car or brand-new car or child's college education or even grad school then after a quarter-century and more than $40,000, your debt will only be $1578 less

After 35 years:
59,782 paid
$1363 still owed

After 35 years without a single late or missed payment, you will finally start to see some progress when you have a little more than one thousand dollars left to pay
Finally, after 36 years you will have finally paid off all your credit card debt.
then after 36 years of paying $142 minimum payment and 17% interest every month, you will finally have paid off your entire $10,000 debt, 

That means over the last 36 years you paid a total of $61,060. Just to pay off $10,000 of credit card debt

In order to pay off that $10,000 you've taken more than three and a half decades of your life and spend more than 60 grand

That's $61,060 you could have used for
  • Shopping
  • Vacations
  • Mortgage/Rent
  • Retirement
  • Children
  • Grandchildren
Just imagine if you had an extra $61,060 you could have used that for anything

No comments:

Post a comment