Thursday February 4 2010
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Our thanks to consumer advocate Clark Howard for this wake-up alert about only paying the minimum monthly payment on our credit cards.
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Credit card minimums leave us in debt for nearly 50 years
MONEY-SAVING MOMENT: Beginning next month, when we open our credit card statements, there will be a new box accompanied by the following wording: “If you pay the minimum payment above, it will take you XX number of years to pay off your balance.”
When we see this — if we pay attention to it — the hope is that it will have a major effect on our behavior.
Ever heard of the mirror trick in dieting? This is a behavior modification technique where you kill your appetite by watching yourself eat in a mirror. Hopefully, the new box on our credit card statement will be our proverbial mirror.
A reporter for The Financial Times of London crunched some numbers and found that the typical American with an average balance and interest rate making only minimum payments won’t be out of debt until 2058! And that’s never charging another penny again to that card!
Now that we have the knowledge, let’s act on it. Pay down those cards quicker. Good payoff calculators can be found at DinkkyTown.net and elsewhere on the web.
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