And, according to Bankrate.com, the average interest rate on that outstanding debt is approximately 15.61%.
Now, while credit card debt has been on the decline – by some 0.7% per quarter since 2007 (per the Federal Reserve), this debt still represents a huge burden on the American public.
Think about it this way. If you wanted to pay off $15,480 in revolving debt at the prevailing interest rate of 15.61% in say 5 years (like a car loan), what do you think it would cost you? How many months would it take or how much would you have to pay each month?
Well, the car loan is a hint. As paying off that amount in 60 months would equate to paying for a brand new – mid-size – car.
In fact, paying this balance off in 5 years would require a monthly payment of $373.24 per month and your total interest would be $6,914.60 over those 60 months (that is nearly half of your balance added to your debt – a portion added that you get nothing back in return for).
That is equivalent to a new car payment (but you would pay less interest on a new car loan than you would on your credit card debt).
At Capital LookUp - http://www.capitallookup.com/
1) They are too easy you get and use (why do you think every business under the sun offers their own branded credit card). And,
2) Borrowers just do not understand how much that debt is actually costing them – how much that double shot of red bull will cost them over the coming years.
And, while we cannot do anything about the first reason, we can help others better understand how much their debt is actually costing them (let me tell you it is much more then just a minimum monthly payment).
We have created two new Credit Card Payoff Calculators that will not only help you better understand your burdening unsecured debt but can help you better manage it over the long-run – making you and your household just that more financially stable.
- The first calculator allows you to determine how much you would have to make in a monthly payment to payoff your balance in a set period of time (a time you choose) and will tell you how much in interest it will cost you in doing so.
- The second calculator allows you to determine how long it will take to pay off your budging debt given a monthly payment of your choice (what you can afford to pay) as well as how much interest you will pay under this scenario.
And, both will help you better understand and mange your debt – that same debt that is keeping you from realize all of your individual dreams.
Understanding your debt and its costs is the first step to properly managing it so that it works for you – to your benefit – and not to the advantage of your lender.
You can find these calculators here: http://www.capitallookup.com/
To learn more, please contact
Capital LookUp LLC