Keep this in mind next time you're tempted to "put the pizza on plastic".The following information is based on an interest rate of 16.99% to 18.99%:
If your balance is $1000.00 and your minimum required payment is $20.00, then $15.00 of the payment goes to interest and only a small portion pays down the principal. If during the next month you charge $15.00 or $20.00 on that card the same thing happens again.Here's a common scenario for many credit card users...
With a $1000.00 balance on your card and a $20.00 minimum payment due ($15.00 will be for interest. Only $5.00 will be for the principal to actually pay down the balance. Your new balance is $995.00.Yep! You paid $20.00, but it was only worth $5.00
By only paying the minimum due, you'll not be able to get off this merry-go-round for years!! You must work hard to get the balance down and here are just a few ideas:
Some reasons to avoid credit card debt:
Copyright 2000 by Leslie Sausage
About The Author: Leslie Sausage lives with her husband in rural Texas. She is the mom of four grown children, a freelance writer and an elementary school teacher! For creative, practical and fun ideas please visit her web site at http://www.heart4home.net
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A year later, I am still paying on my charge card and don't even remember what it is that I bought and am still paying for! This year, I decided to incur no new credit card debt and to work at paying off my existing balances. I am taking the advice from a post on Thriftyfun and using gift cards that I purchase for myself at my favorite stores, they are quick to use like a charge card but I won't be paying any interest to a charge card company; hopefully I am on my way to being charge card free!
Nice article! Am showing it to daughter.
My former step dad was a long haul trucker. He was paying for years on steaks he bought on the road. Now that debit cards are the norm, he might have fared better but he was never one to be frugal. He won 125,000.00 on Bingo once. I asked his wife (not my mom) if they broke even and she just chuckled and shook her head.
I once had credit cards, good credit, good job. I had a medical catastrophe and ended up on welfare. Think about it; it could happen to anyone! At any rate, I haven't had a credit card since. Even after I got back on my feet. My son, seeing what had happened to me, get rid of his credit cards. 25 years and we've been doing just fine without. I suggest it for everyone. It's to easy to charge on impulse. With all the money I can save not paying on interest, I can have money in savings for emergencies.
The trick is to pay off the whole amount EVERY MONTH. That way you won't get charged any interest. Bank of America puts out a very good 1-2-3 card. 3% on gas, 2% on grocery stores (including Super Walmart everything there, and places like the 99cent store which sells groceries), and 1% on everything else. At the end of the month, if you have over $20,000 in their bank in various accounts such as checking, savings, or investments through Merrill Lynch, you will get back all those percentages PLUS an extra 25% of that amount.
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