Credit Card Debt Realities
The average American carries over $5,000 in credit card debt. Does that sound familiar?
With a typical interest rate of 16 percent, it would take 12 years to pay that off, assuming the cardholder makes only the minimum payment and doesn’t charge any new purchases. Worse, that person would pay an extra $2,500 in interest payments for a total bill of $7,500.
Think of what you could do with that much money. A fabulous vacation perhaps? A used car for your son in college? If you socked it away in your
retirement account, you’d have an extra $24,000 in 20 years. That’s a lot of greens fees.
Simply put, that money that could go toward so many bigger and better things. You wouldn’t set fire to a stack of $100 bills would you? Paying interest on your credit cards isn’t much different.
That credit monkey on your back can affect every aspect of your financial picture from how much money you have in your wallet to whether you get the next job you apply for. That’s why taking control of your credit cards –and keeping debt at bay — is the No. 1 ingredient for financial success. Virtually everyone can learn to use credit cards better.