Credit Card Payments
I understand, sometimes just making the minimum payment is a challenge.
A credit card has one of the higher interest rates, and because it is a line of credit that can be utilized for years to come, most cards have a rate that can change. This may make paying that balance down seem daunting.
Understanding how the payment effects the long-term cost is important and may help encourage you to work harder at paying it down.
Consider this:
- A balance of $3,417.07 with an interest rate of 15.75%
- With a current minimum payment of $69.00 that adjusts down over time as a percentage of the balance
- Will take 28 years to pay off if only the minimum payment is made
- With a total cost of $8,864.00
If you increase your payment to:
- $119.00 per month
- For three years
- The total cost will be $4,296.00
- The total savings is $4,568.00
Check your Visa statement, you should see a similar breakdown to help you understand your options with your card.
As a financial coach I hear frequent concerns regarding interest rates. I know credit card rates can run much higher than my example above. Focusing on the rate, which most likely is out of your control, is frustrating and distracting. Focusing on the debt and creating a money plan to pay down the debt, will be more effective in achieving a positive result.
Create an action plan and be intentional with your resources. Control the controllables.
And if you want help getting started, let’s meet. CLICK HERE to schedule your Personal Financial Coaching session.
Lisa Atkinson
TFCU | Personal Financial Coach
latkinson@54zhangmi.com
As a Personal Financial Coach, I do not provide legal or tax advice. Tucson Federal Credit Union does not guarantee that this service will achieve any particular objective or outcome. For any legal advice, please seek the advice of an attorney or tax professional.
