Credit Card Debt
Millions of North Americans struggle with credit card debt. Many have little idea how they got into their current mess and less chance of getting out. This page demonstrates the high cost of using credit cards.
To use this page, supply the following information: The amount owed (principal), the current interest rate (You can actually enter two rates: standard credit cards such as Visa and MasterCard have an annual rate of about 18.5%. "Store" credit cards average about 28%. These rates vary and can change at any time.) Enter the minimum payment percent (most credit cards require 3% or 5% of the balance as a minimum payment). When you submit this information, you will get back a chart that indicates the monthly payments, the monthly balance and the total interest paid to repay the "loan". We also provide the option of paying a set amount each month which is, hopefully, higher than your minimum payment. (To calculate a suitable payment, use $5 for every $100 of debt as a starting point and add on as much as you can afford.)
Some factors to keep in mind: This page calculates the interest on the balance at the end of the month. Most credit cards calculate the interest based on the daily balance. As a result, the figures you see on the credit card statement (for interest) may be slightly higher. (Tip: To save a little bit of money, make your payments as soon as you can each month - don't wait for the due date.) We assume that you are not charging anything during the month. Obviously, if you continue to use the card, it will take much longer to pay off than we indicate.