How To Trap Yourself Into Credit Card Debt And How to Get Rid of Credit Cards Fast and Cheaply ?
Credit card or plastic money is very popular these days and is widely used. It's really a huge utility if used comprehensively, but it's also one of the main reasons many people have credit card loans Causes trapping. Let's see what happens to most people
Many retailers are implementing easy payment schemes for their products or services, with a fraction of the money for monthly installation, you can buy thousands of dollars worth of items or go on a luxury vacation that If you can't afford to buy one in a thousand. Money is needed, this monthly installment is automatically charged from your credit card. Each month, you pay the minimum amount of your credit card balance and You keep spending on your credit card. Use the case study to review how a person's credit card debt can grow and what it will take to get rid of it
Case study
Scott earns 500 500 a month, has a credit card with 12% interest. All of his credit cards allow him to pay at least ٪ 3 or 10 10, which is much higher. Its credit card limit 15,000
Scott's credit card balance for the current month is ، 4,550 (in principle 000 3,000 and 50 1,550 interest). He pays at least his credit card balance and will swipe an average of $ 500 per month on petrol and other facilities
Let's see how Scott's credit card balance grows:
Month 1
Credit Card Balance = 4,550.00
Minimum payment = $ 136.50
New credit card costs = $ 500.00
New balance = ($ 4,550 - 6 136.50 + $ 500.00) = $ 4913.50
Month 10
Credit Card Balance = $ 7976.02
Minimum payment = $ 239.28
New credit card costs = $ 500.00
New balance = ($ 7976.02 - 9 239.28 + .00 500.00) = $ 8236.74
Month 20
Credit Card Balance = $ 11109.85
Minimum payment = $ 333.29
New credit card costs = $ 500.00
New balance = $ 11109.85 - 3 333.29 + $ 500.00) = $ 11276.55
Month 30
Credit Card Balance = $ 13662.60
Minimum payment = 9 409.88
New credit card costs = $ 500.00
New balance = $ 13662.60 - 9 409.88 + $ 500.00) = $ 13752.72
Month 36
Credit Card Balance = $ 14961.02
Minimum payment = $ 448.83
New credit card costs = $ 500.00
New Balance = $ 14961.02 - 8 448.83 + $ 500.00) = $ 15012.19
If Scott continues his practice, he will cross his credit card limit 36 months later than the current month
Scott is said to stop using his card with a balance in 36 months of card 15012.19 and continue to pay the minimum monthly payment. It will take 228 months to pay only his 15 15012.19 for 19 year
The above example is a simple case study to tell you how your credit card debt can be piled up so quickly when you don't even know about it. You have a lot to get rid of this debt Time is running out and a lot of money should be spent on interest. In real life, many people have more than one card and other loans that can be helped. So the situation could get worse
How to get rid of credit cards fast and cheaply ?
If you are already in this situation, the first thing you need to do is change your way of making the minimum payment. Paying more each month will pay off your debt faster but the question is you You can say that you cannot afford to pay the minimum. In fact, the easiest, fastest and cheapest way to get rid of your credit card debt is to maintain your current minimum monthly payment
For example, we use the Scott case back. If he wants to pay his 12 12,5012.19, which is a minimum payment of 44 8,448.83, this is his cheap payment. If he lowers his credit card balance every month If he keeps paying 8 448.83 instead of a small amount, he will only need 43 months to pay off his debt as compared to 228 months. That means, Scott borrowed less than 4 years instead of 19 years Will live a free life
Credit cards will be important in the lives of many people, use them wisely for your convenience, but you manage your credit card balance very carefully, allowing this plastic money to drag you into the financial crisis. Will not give The ideal way is to pay the full balance every month
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