Article: Americans Will Work Seven Months Just to Pay the Interest on One Credit Card.
Americans Will Work Seven Months Just to Pay the Interest on One Credit Card.
The average household credit card balance in America is 8,500.00 with a 16.9 (this is a little out dated) percent interest rate and a current monthly minimum payment of 170.00. If only the minimum payment is paid each month it will take approximately 39 years to payoff and cost 19,000.00 in interest, provided that it is never used again!
The average hourly wage is 16.00 dollars. To pay just the interest alone, it will take 1,187.5 hours of work, that's 30 weeks or 7.42 months going to interest just to service that one credit card. That's 7 months of life for nothing more then interest. I could think of a lot of other things that I would rather work for, couldn't you?
If a constant payment was made of 170.00 (equal to the current monthly minimum payment) until the credit card was paid off it will cost 6,305.00 in interest and be paid off in just 7 years as opposed to 39 years paying only the minimum payment month after month. That's a saving of 12,695.00 in interest (your money). Doing nothing more then paying a constant payment.
Let look at this with just the figures. 8500.00 balance on a credit card paying the just the minimum payment each and every month until it is paid off. Total cost in interest is 19,000.00 dollars. At 16.00 dollars an hour it will take 1,187.5 hours of work (not including taxes) to pay the interest. That is 30 weeks or 7.42 months of work. HOW does that sound? Great!
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Okay let say that you decide to pay the same payment each and every month until the debt is gone. Seeing that the monthly payment this month is 170.00 that is the amount I am going to use for this illustration. Paying 170.00 a month until the credit card is paid off, it will only take 7 years. Instead of paying 19,000.00 in interest it will cost 6,305.00 in interest. HOW COOL IS THAT?
It gets better, now when the credit card is paid off take the 170.00 and invest it. Remember that it was going to take 39 years to payoff before and we paid it off in only 7 years we can invest the 170.00 for 32 years right? It is my example I can do what ever I want. Investing the 170.00 each month for 32 years and figuring a simple compound interest of 8% annually YOU would have 295,699.30 saved.
(This of course is for illustration purposes only in a tax deferred account.) No investments are being sold except for you to invest in yourself.How much did this cost extra per month then that which was currently going to this credit card? NOTHING! Why doesn't anyone teach this in School?
So what I am saying is if you do nothing differently then you are now you will be in debt and have nothing for retirement plus work for the credit industry for along time for nothing. But if you pay a fixed payment on your debt and invest the money when the debt is paid off you will live happily ever after.
(The above illustration was just that an illustration, your actual financial situation is your own business and all I seek to do is to expose the truth that debt is robbing people of a wonderful life. God Bless)
Eliminate debt, stop check to check living for a better future today. The use of easy credit and Credit Cards destroy abundent living and enjoying life.
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