If you are struggling to pay off your credit card debt, you will never be able to do it by making only minimum payments.
Let me give you an example: Let's say for instance that you have a credit card with a balance of $7,500.
00, with an interest rate of 15%, and your minimum monthly payment is $250.
00 per month.
At this rate, it will take you 12 years and 11 months to pay this off.
You will also have paid $4,068.
00 in interest.
How can we pay this off sooner and pay less interest? If we only increased the monthly payment by $100.
00, we would be paying $350.
00 per month.
At this rate, we would be able to pay off the balance in 8 years and 10 months.
We would also only have paid $2,491.
13 in interest.
Just by increasing our minimum monthly payment by $100.
00, we have saved 4 years and 1 month in payments, and reduced the interest we paid by $1,576.
87.
What if we doubled our minimum monthly payment? If we increased our minimum monthly payment to $500.
00 per month, we would be able to pay off the balance in 6 years and 2 months.
We would have only paid $1,557.
00 in interest.
This would save you $2,511.
00 in interest, and would have saved 6 years and 9 months in payments! Please remember that minimum payments will never get you out of debt.
You need to apply as much money towards your debt as you can, as fast as you can.
Reduce those years of payments as much as you can, and put those interest payments in your pockets - not the credit card companies.