This time of year Canadians get many notices from their credit card companies. Some are graciously waiving this month’s payment to help with the burdening bills from the holidays.
Just what are the implications of skipping a payment? Or more likely what is the real cost of paying only the minimum payment every month on your credit card?
Using the tools provided by The Globe and Mail, we have looked at the consequences of paying only the minimum amount on your credit card.
One work UGLY!
With a balance of $10,000.00, paying interest of 18.70%, it will take a person 19.7 years to pay off the card. Likely the same time as it will take for a person to pay off their mortgage. The cost of borrowing that initial $10000.00 will be $27,759.00 in interest payments. Is it any wonder banks hand out credit cards like candy.
Avoid further debt, avoid consolidation loans that prolong this problem. Most of all avoid debt settlement companies that will only add to the debt problems.
If you debt has become an unbearable burden, speak to a trustee in bankruptcy. Only a trustee in bankruptcy can protect you from your creditors and get you on a real fresh start for 2012.