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Tuesday, April 13, 2010

Credit Card Debt Explained With a Glass of Water

[This post is written and copyrighted by Financial Elite (http://financialelite.blogspot.com/ ).]

TotalDebtRelief.net, who is one of my followers on Twitter, sent me the link to this video regarding paying only the minimum payments on your credit cards.

As they explain it the video uses a simple analogy to describe how the average American is throwing away their money to the credit card companies.

The figures aren't really accurate as about half of the payment goes to interest not a dollar. The dollar may be more accurate if the actual minimum payments was $142, but at that balance and that interest rate the payment would be more in the $280 range.

The thing that is accurate is it will take you decades to pay back your credit card debt. Don't believe us?

Take a look at your most current credit card statement. The new CARD Act requires creditors to show you exactly how long it would take you to payoff your credit card if you only made the minimum payments. By just paying a little more you can be debt free in a few years rather than decades.

If you haven't already, check out your latest statement. The amount of time it takes to be debt free paying the minimum payments will blow you away.



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