Minimum Payments Will Eat You Alive

MINIMUM PAYMENTS A MONSTER THAT WILL EAT YOU ALIVE! You have a credit card 100% with a $10,000 balance and 20% interest rate. $10,000 Payments ACCEPT CHARGE? o0 ок CANCEL DEBT: $10,000 0123 4567 8910 1112 If you pay off the full balance when it's due, you'll pay no interest charges. STICK MAN 08/12 So, what happens when you pay a small percentage? Minimum Payment! $15 \20% 75% 10% Interest Rate, Payments Payments 20% is the speed that interest charges But cards also let you pay less than the full balance--usually a small percentage. | pile up if you don't pay in full. 5 years 14 years 23 years INTEREST: $12,100 INTEREST: $7,000 INTEREST: $2,000 DEBT: $10,000 If you make payments of 10% it will take you 5 years to pay off. DEBT: $10,000 DEBT: $10,000 If you make payments of 4% it will take 14 years to pay off. If you make payments of 3% it will take 23 years to pay off. .it will take 74 years to pay off! 74-years Are you 12 noticing a pattern? Credit card companies love it when you pay this much interest! Minimum Payment! $15 Avoid this monster! Only use credit cards when you can pay them off in full! INTEREST: $47,100 So what happens if you only pay 2% --a common minimum payment? DEBT: $10,000 Omint.com can help you track your spending and find low interest cards if you must carry a balance. SeeingFinance.com Mint.com/blog 0000