What happens when you only pay the minimum on you credit card debt
A lot of people, just like you and me, are only paying the minimum on their credit card balances. Doing that is probably a bad idea and it may be time to have a rethink about paying the balance off or getting some help.
The typical American household would need about 13 months to pay down the average debt of $8,195, according to a recent survey by CreditCards.com.
That's assuming they're being very aggressive and putting 15 percent of their income toward paying off debt. (The American Consumer Credit Counseling recommends allocating about 5 percent of your income, and Northwestern Mutual recently found that two in 10 people allocate over 50 percent of their income toward getting out of the red.)
"If you're only making the minimum payment, which is typically 1 percent of the balance plus interest, you're going to be in debt for literally decades."
Ted Rossman, Industry Analyst
How to pay off debt faster
If you have a high balance on your credit card, there are a number of ways to get that balance down.
1. The first is to obviously pay more off each month and save plenty of money by not paying a fortune on interest payments.
2. Secondly, if that's difficult, try a consolidation loan which will help you spread your payments from difference accounts into a more manageable amount each month.
3. Thirdly, if that's going to be impossible, then get in touch with a team of debt professionals like Debtko.com who will offer some advise on what your options are. Sometimes when it seems like there are none, there actually might be a solution to the issue. Debt relief isn't for everyone but it's certainly one option to look at if you are really struggling with payments.
Why do people need debt relief help?
Getting into debt is easy and when you have an income you can often manage the payments. However, it is normally when something extraordinary happens to you like a medical emergency, a loss of a job, or a divorce which makes paying off debts a real pain.
It's not uncommon and there are solutions so get in touch and we'll be happy to help.