Minimum monthly credit card payments can last 42 years!
I was listening to the Clark Howard show yesterday and he was reading an article from The Los Angeles Times stating that one-third of Americans are paying only minimums on their credit cards. At that rate, the average credit card holder with an 18% interest rate will be in debt for 42 years, Can you say 2050? And that’s never charging another penny to the card as long as you live!
The interest on credit cards is figured daily. He says that getting money to them earlier in a billing cycle is to your benefit. If you want to climb out of debt, try making a separate payment every 14 days to the credit card company. This method is proven to get you out of debt at one-fourth the time.
Simply mark your calendar every 14 days and write that check or send your online payment on that day. That will add up to one additional monthly payment a year. Just be sure to work these payments around your statement cycle to avoid paying late fees.
The banks will try to keep you hooked for decades by lowering your minimum monthly payment as you go along. Don’t fall for it! Keep paying the same amount each time — even if your monthly payment gets drastically lowered.If you have a little extra money to pay, be sure to put all of it on your credit card with the highest interest rate. Don’t simply dole it out among all your credit cards without first considering interest rate differences.
Finally, you can’t simultaneously pay on a card and then use it and expect to get out of debt. You’ve got to ditch the plastic!
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Tags: Clark Howard, credit card, debt, interest rate, los angeles times
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December 31st, 2008 at 2:33 pm
[...] because important new rules that affect credit card issuers were put into effect a few weeks ago. One third of credit card holders pay only the minimum payments on their balances and fewer than half pay off the balance monthly, so simply put, revolving [...]
April 15th, 2009 at 1:37 pm
After reading through the article, I feel that I need more information on the topic. Can you suggest some resources ?
April 19th, 2009 at 7:16 pm
This article is very true. I enjoyed reading it.
November 28th, 2009 at 8:40 am
Hi, I just stumbled upon your site whilst I’m browsing on Google as I’m looking for some info on debt relief!. It’s an interesting site so I have bookmarked you and will revisit tomorrow to give it a more indepth browse when I’m more free.
December 9th, 2009 at 4:40 pm
Helpful info here and if you find yourself a similar position there are a number of strategies you can make use of to manage your credit card accounts effectively. If you are going to open up a single credit card account, you will potential want to generate sure that you have a Visa or a MasterCard. These cards are approved by the majority retailers, whereas other cards like American Express or Find may not be.
December 17th, 2009 at 4:55 pm
thanks very usefull information !
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January 23rd, 2010 at 6:49 pm
Figuring out exactly how much I was spending on the interest alone helped me out of credit card debt. So, I decided to create a form that would help calculate credit card interest on a daily, monthly, and annual schedule. With that information, it helped me figure out how paying the minimum wasn’t enough. Please take a look and leave me any feedback on how to improve it.
February 7th, 2010 at 9:01 am
what a great site and informative posts, Regards, Reader.