This Debt Will Outlive You
Don’t spend your whole life paying back a debt.
At C.E Craig & Associates, we run into statements like the one pictured below all too often. By making only the minimum monthly payments, this debtor will still be paying off a loan of $18,000.00 for 154 years. Not only that, but at $339.00 a month, they will have considerably overpaid!
This is a real credit card statement received by one of our clients. If we are to take a look at the fine print, it will become clear that they had no chance of paying this bill off by making only the minimum payments. Recently, the government has come out with legislation which states that credit card companies are required to have this information on their statements. Credit card companies have an interest in keeping people paying interest every month. This is the process by which credit card companies make their money. When you are already suffering financially, it can be impossible to make payments beyond the minimum required. This means that your payment is only going towards the interest, and the principle is untouched. If this is the case, you will be in debt for much longer than you would expect.
The longer you are paying off your debt, the more money your bank makes from you. It is so important to read every part of your bank statements, and to make sure you understand how much you owe, and for how long you’ll be in debt. If you find that you can’t escape the minimum payment trap, it might be time to seek professional financial advice.
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