There’s a reason that the minimum payment on a credit card is so low, and it isn’t because the big credit card companies care about you or your finances. The minimum payment on a credit card may be convenient for you, but it’s designed to keep you in debt and making additional payments to them for years. Not only that, as you continue to pay the minimum payment, the credit card companies reap obscene profits from you as you struggle to make ends meet. Long-term periods of minimum payments from you equal big interest income and profits for them. Here are some examples of what making the minimum payment will do to you:
- If you owe $1000 at 18% interest, it will take you 8 years to pay off your card. You will have paid $863 in interest.
- If you owe $1000 at 21% interest, it will take you 10 years to pay off your card. You will have paid $1,398 in interest.
- If you owe $3000 at 18% interest, it will take you 26 years to pay off your card. You will have paid $6,863 in interest.
- If you owe $3000 at 21% interest, it will take you 47 years to pay off your card. You will have paid $15,398 in interest.
If you find yourself in a position in which you can only make minimum payments, you will most likely never get out of debt. If you want to see how long it will take to pay off your credit cards, you can use the Credit Card Repayment Calculator at:
http://www.federalreserve.gov/
As you can see, the credit card companies have a powerful advantage over you. If you get stuck in their snare, you might never get out. However, bankruptcy laws were written to help people like you get out of the cycle of credit card debt. If you are in trouble, contact the Minnesota bankruptcy attorneys at Behm Law Group LTD. We will help you determine if bankruptcy is the best option for you.
