The TRUE Cost of Credit
by Michael Bovee
CRN Specialist
Consumer Recovery Network
So, I’m sitting in a restaurant doing the typical American “night out” with the family. I keep seeing our waitress run to and from the tables with credit cards and receipts when it occurs to me that I’m the only one paying in cash. This got me thinking…what is the TRUE cost of credit?
Dinner and a Show
One of the biggest themes that has contributed to each of our debt problems is the lack of a true understanding of the cost of credit.
Consider this. How many of us stop to think about how much that new item we are purchasing on a credit card actually costs? Do we really stop to think about the APR amortized over the period of time it takes to pay off the purchase making minimum monthly payments every time we buy something? If we did, we might realize a night out to dinner and a show can cost much more than what your receipts tell you.
Let’s say dinner and a show costs $125.00. You pay with a credit card that has an APR of 17%. Your minimum payment is 2%. The actual cost making minimum payments is $218.98 and will take 7 years and 4 months to pay off.
What if you are paying higher interest because you were a day late in paying your bill once in the past to the credit card bank? Or, the bank raised your interest because your balance on that card or any other card, for that matter, was too high?
Dinner and a show still costs $125.00, but you pay with a credit card that has an APR of 29%. Your minimum payment is 2.5%. The actual cost making minimum payments is $445.11 and will take approximately 12 years to pay off.
Seriously?!
Seriously. And if you compound this example by how many purchases you make on the card in, say, one year and make minimum payments, you just got yourself a one way ticket as a passenger on this bank’s gravy train, seemingly…for life!
Now, compound this one example by the other credit cards in your wallet or purse. Again, I ask, how many of us think about this each time we make a purchase using credit? This is just an example of the true cost of credit!
Credit Debt
How are you supposed to get enjoyment and have fun and excitement and satisfaction from life if you are constantly stressed about paying your bills?
Identifying a debt problem isn’t so hard. You run out of money before you run out of bills. You may notice you have to cut back in certain areas. You cannot do the things you want to do. You are doing the balance transfer dance. You have to pay for necessities like food, transportation, clothing with a credit card and that cards balance keeps increasing.
Accumulating debt is awfully easy to do. Getting out of debt, however, is one of the harder struggles you may ever experience. I am here to tell you it does not have to be a struggle!
Would you like to learn how to save tens of thousands or perhaps even 6 figures in debt payments? Surprisingly, just a little tweak in the way we pay down debt can get us debt free in half the normal time. It really is simple.
You may now realize that your debt was created either partially, or in full, with a lack of knowledge, understanding and perspective. Where you were once lacking, you can gain great abundance and walk freely down the path to financial freedom.
GET EDUCATED and GET OUT OF DEBT!
Contact Consumer Recovery Network for more information on how to be free from debt.
