Minimum Payments

 

Are you a sucker? If you make only the minimum monthly payment on your credit card balance you are. Do you know what it costs to buy something when you make only the minimum monthly payment every month? Here’s what it costs in interest over the life of your balance if you have a balance of $1,000 with an interest rate of 18%.

Minimum payment   
Interest cost
1.5% 
$9,015
2%  
$2,852
2.5%
$1,496
3% 
$1,000


The only way to get rid of your credit-card debt is to make payments early and often. You can’t settle for the minimum payment. Any extra cash you can squeeze out of your budget applied to your credit card is money well spent. Cut out the coffee, the newspapers, the magazines. Cut out the restaurant meals, the new clothes, the movies. It won’t be forever. Nope. And when you’re finally debt free you can blow a great big raspberry at the credit card companies and say, "Never again!"





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