Why do credit cards seem to take so long to pay off? I've met with clients who are stunned that it can take over 15 years to pay off a simple $4,000 balance. They feel by paying a $10 to $15 more than the minimum should cut the pay off date significantly. It does only about 15 years.
What you as the consumer need to do is look at each month's statement and review how much of your payment goes to interest and principal. You may astonished that only $20 or $25 of your $75 amount actually goes to the balance or principal.
Credit card companies really like all their customers who only pay the minimum every month. If you happen to be one of the minimum payers out there, your balance will pay off in about 35 years. Not good.
Another way we increase our pay off dates is to continue to use the credit card for monthly purchases. I had a client each month charge their satellite bill on a Visa and they wondered why the balance wasn't getting any lower. They were charging an additional $125 a month, but only paying $200 a month. When I reviewed several bills I noticed the balance was increasing since the $125 charge and the interest was actually more than the payment. Not good.
What made this even worse was they had the money to pay each month it was just out of convenience they used their Visa. Now they pay out of their checking account with a direct debit.
You can save a lot of money just following some simple steps, but steps we are not taught in school or by our parents. I go over many great tips in my book you can purchase at debtstrength.com The cost of the book can be recouped just by implementing only one idea.
Once again knowledge is power. Increase your Debt Strength today.
Visit http://www.debtstrength.com
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