I speak to a lot of people who say things like I dont really
have any debt problems, Ive just got a couple of credit cards and I can afford
to make the minimum payment each month, so Im not really worried
When I then ask them if they have any idea how long this
will take to repay, they often glaze over & say No how long?
Well, lets assume you have a 5000 credit card balance, and that
the credit card company requests a 2% minimum payment each month and the
monthly interest is 1.53% per month / 18.3% per annum which is an AVERAGE
interest rate (some credit cards & store cards are double this rate, but Ill
take a prudent approach & use this rate).
And lets also assume you set up a payment scheme whereby
the credit card Company automatically takes the minimum payment from your
account each month until the balance is down to 100 and you then pay off the balance
in full.
The credit card Companies are really helpful They now make
statements like;
If you make only the minimum
payment each month, it will take you longer and cost you more to clear your
balance.
But, have a guess how long you would be paying this for?
Any idea
10years
20years
30years
40 years
50years
60years Almost there
The answer is 69
years
How old are you now?
How old will you be in 69years time?
Oh, and by the way In those 69years, you will have paid
back 20,850 to repay a 5000 credit card balance
Now think about that bargain holiday you booked on lastminute.com and the
bargain sofa you bought at DFS and those bargain trainers you bought at JD
sports they dont look such bargains anymore do they
So, no matter what your credit card balances are, dont just
play the game that the banks want you to play Get in touch with me now & Ill
show you a better way of dealing with your debts pauljohnson@thedebtsurvivor.com