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Credit Card Debt Help 1 - This
Page Is No Longer Updated
In this credit card example we only
consider a few factors in determining the total cost of
credit card debt. We are making an assumption that Tom
will no longer use his credit cards and that all payments
will be made in full and on time.
We all know that this is not always
possible. Any number of factors in our personal lives
can cause us to make a late payment or send less than
the minimum amount.
Tom has a current outstanding balance
of $20,000 on various credit cards, each month he pays
the minimum amount of 2.5% of his outstanding balance.
His average interest rate on all credit cards is 20%.
Tom has stopped using his credit cards and does not plan
on adding any new charges.
As you can see in the chart below, when
Tom pays his credit card debt on his own (at 20% interest),
he will pay back a total of $71,620 (Outstanding Balance
$20,000 + Interest Charges $51,620) and it will take him
an estimated 39 years and 4 months to pay-off. Complete
our free no obligation application now!
We are sure you are astonished at these
figures, but we assure you they are accurate. Let us explain
why. Unlike a conventional loan, most credit card companies
do not set a fixed dollar amount due each month. Instead,
they will determine a percentage of the outstanding balance.
This means that if you owe $20,000 and your minimum monthly
payment is 2.5% of your outstanding debt, your monthly
payment would be set at $500 ($20,000 x 2.5%).
As you pay down your total outstanding
debt, your minimum payment will decrease. This means that
after a few years when your outstanding balance finally
decreases to $15,000, your minimum monthly payment of
2.5% would now be $375 ($15,000 x 2.5%). The credit card
company is not doing you a favor, they are dramatically
increasing the amount of interest you will pay as well
as the number of years it will take to pay off.
| Paying your
debt - on your own |
Current balance: $20,000
Monthly payment: 2.5% of outstanding
balance |
| Interest rate |
Interest paid |
Length of time |
| 24% |
$94,819 |
63 yrs. 11 mo. |
| 20% |
$51,620 |
39 yrs. 4 mo. |
| 18% |
$39,946 |
33 yrs. 2 mo. |
| 15% |
$27,451 |
26 yrs. 11 mo. |
| 12% |
$18,913 |
22 yrs. 9 mo. |
If Tom was to pay off his credit card debt through The
Credit Network, he would save thousands of dollars and
many years. Using the same debt of $20,000, but a fixed
monthly payment of 2.5% of the original debt ($500), you
can see the dramatic decrease in interest charges and
number of years in the chart below.
The Credit Network
offers these benefits through a combination of lower interest
rates, fixed monthly payments that fit your budget, re-aging
your account to a current status, and stopping over the
limit charges and late payment fees. Complete
our online application form now!
Why should you pay $19,000 - $95,000
in interest and spend 23 - 64 years doing it, when The
Credit Network can help you pay your debt in
as little as 3-5 years and save you $17,000 - $88,000
in interest charges.
| Paying your
debt - through The Credit Network |
Current balance: $20,000
Monthly payment: 2.5% of outstanding
balance |
| Interest rate |
Interest paid |
Length of time |
| 15% |
$7,405 |
4 yrs. 7 mo. |
| 12% |
$5,338 |
4 yrs. 3 mo. |
| 10% |
$4,181 |
4 yrs. 1 mo. |
| 8% |
$3,168 |
3 yrs. 11 mo. |
| 4% |
$1,424 |
3 yrs. 7 mo. |
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