Struggling with your finances? In debt? Stressed about money? You’re not alone.
A significant number of folks are not aware of how to budget or gain control over their finances.
Real-World Example: $10,000 Debt @ 18% APR
Timeline
41 years and 8 months to pay off
Interest Paid
$27,315
Total Cost
$37,315 (3.7x the original debt)
Monthly Payment
$200 initially (2% of balance)
Minimum required payment decreases as balance decreases
⚠️ The Minimum Payment Trap
Paying only the minimum (2% of balance) means your payment shrinks as the debt decreases. With 18% APR charging 1.5% interest monthly, you’re only reducing your balance by 0.5% each month. This creates a dangerous cycle where you barely make progress and interest accumulates for decades. Note that your credit card terms may have a higher percentage or higher percentage + monthly interest combination, or even a set flat rate. Also note that the national APR average is around 21.4%. That means this is a more conservative example.
Better approach: Pay a fixed amount above the minimum to escape the debt much faster and save thousands in interest.
Better approach: Pay a fixed amount above the minimum to escape the debt much faster and save thousands in interest.
This is why I created a free ebook to help with Personal Finance Management Education.
You can get your complimentary copy right now by filling out the form below.
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