No minimum payment this month. That's great! Or is it?
My recent credit card statement says, “To ease the strain of the holiday season; we will waive your minimum payment this month”. Isn’t that kind of the bank? They also state though, that interest would be added to my outstanding balance. As my minimum payment amount is 2% of my debts, this means the bank will charge interest on 100% of debt instead of 98%. Something is wrong here. 19% interest on $800 compounded annually is how much?
For years credit card companies have been telling their customers that all they have to pay is the minimum payment on their outstanding debt. According to my statement (in small print) it is going to take me 30 years to pay back my debt if I only make the minimum payment. That means I’ll be in my seventies by the time I’ll pay back my credit card. What a way to spend my retirement, paying for Christmas gifts bought 30 years ago. This is one of the reasons people carry debt for such long period of time.
Credit is often a blessing and a curse. It is fine if you can use your card and pay off the total balance owing at the end of the month. If you cannot pay off the full balance and are just paying your minimum payments, you could have a serious debt problem. Although you may think you have good credit from making your payments each month, you must ask yourself this serious question: “How am I going to pay this off, and how soon?”
If you are not sure perhaps you should speak to a credit counsellor. The counsellor will assess your financial situation and determine what the best strategy would be to pay back the debt. Perhaps you could do it on your own. A little self-discipline and a large payment could be the answer; however this payment needs to be substantially more than the minimum. If you cannot make such a large payment, your counsellor can discuss some other options, including hardship programs.
Contact them now for a free confidential assessment, and get out of the continual debt trap of minimum payments.