Credit card minimum payments may seem convenient on the surface, but only making the minimum payment each month can be quite costly Ė and, it can take you several years to finally get your credit card paid off.
Letís say you have a $10,000.00 balance on a credit card with a 17.500% APR. If your minimum payment is $300.00 and that is all you pay each month, it will take you 18 year(s) and 5 month(s) to finally get that card paid off (assuming you donít add anymore debt to the balance). You will have also paid $6,051.82 in interest alone.
If you send a fixed $350.00 payment, on the other hand, this extra money will make it possible for you to pay off that same balance in just 3 year(s) and 2 month(s) Ė that is 15 year(s) and 3 month(s) sooner than if you paid just the minimum payment. You will also only pay $3,030.01 in interest, saving you $6,051.82.