It may be surprising for you to know how expensive it is to borrow money from a credit card and how long it takes to pay off a credit card balance. There are many good tools for figuring out the true cost of credit. On your search engine, enter “Credit Card Calculator”. Choose a website for calculating your personal credit card debts.
For my example, I used this website: http://www.bankrate.com/brm/calc/MinPayment.asp. According to this calculator, if you owe $1000 on a credit card that charges you 18% interest, and make only the minimum payment each month, you will pay a total of $2115.41 ($1000 principle + $1115.41 interest) and it will take a whopping 153 months (12 years, 9 months) to pay off completely! And that assumes you don’t add any new charges. If you make more than the minimum payment, say $100 a month, you will pay the loan off in 11 months and pay $91.62 in interest. That saves you $1013.79 in interest and 11 years, 10 months in time. The church’s Provident Living site has many other tools to help you manage your finances. Check it out! You can link to it from this blog.
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