My Great Grand Kids Will Be Paying Off My Credit Cards
Monday, June 7th, 2010It’s been a few months since I’ve written anything about money. I wish I could tell that it was because we struck gold and have been busy on a first class tour of the world. Unfortunately, it’s because we’ve been busy working hard and trying to keep up with the big changes that are about to take place in our lives. We’ve not done a very good job at tracking our money recently which without a doubt means we’ve been spending more than we should. We plan on catching up on all of earning and spending tracking really soon, and getting back on track with some of our goals that we have lost site of.
In the mean time, I thought I would share a little credit card story with you.
In recent months a law was passed to keep credit card companies in line. One of the clauses of this law requires credit card companies to include some new, and eye opening, information on your credit card bill each month.
Have you noticed this new information?
Go ahead, and find a recent bill and take a look at it. I’ll be waiting here with an ammonia stick to bring you back around after you pass out from the shock.
Did you find it?
This new law requires credit card bills to state how long it will take you to pay off your credit card if you only make the minimum payment and do not purchase anything else. Your credit card bill must also state how much money you will end up paying in interest over the millions of years it’s going to take for you to pay it off.
In case you are too afraid to look at your own credit card bill, I will let you know what mine had to say.
Statement Due Date 04/04/2010 (This was an old bill, so don’t panic)
Current Balance $5, 388.21
Minimum Payment $124.00
Interest Charged for this period $120.77
How insane is that?? Less than $4.00 of my minimum payment goes to paying off the balance, the rest goes to interest. I have an interest rate of roughly 25%. It would take me forever to calculate the weighted whatever of the interest rate of my purchases and cash advances.
It gets better, or worse, depending on your perspective.
If I pay only the minimum payment it will take me 221 years to pay off this poisonous thing. In 221 years this stupid credit card company probably won’t even exist. Credit cards as we know it probably won’t even exist in 221 years. My great grand kinds would have to pay off my credit cards if I only made the minimum payments.
If I only pay the minimum payments over the next 221 years, I will have paid $142,320.00 in interest.
Did your jaw just hit the ground? Mine did.
The credit card company also includes some good news. Here is the good news (if you can call it good news), if I pay $216.00 a month towards the card, it will be paid off in three years. I will pay $7,770.00. That’s a savings of $134, 550.00!
Three years isn’t fast enough for me. My goal (our goal I should say) is to have this thing paid off by the end of the year. We pay at least three times the minimum payment, and most of the time we pay more than that.
Back on January 1, 2010 the balance was $5,910.01. Today the balance is $4,033.15. That’s a pretty good junk we’ve taken out so far, but if we were on schedule it should be all the way down to $2,955.00. We’re $1,078.15 behind. I could make excuses all day for our stunted debt pay down, but I’m not going to waste your time with that baloney. Fear not, we have a plan. It’s going to involve a few stunts and moving money around, but it’s going to be totally worth it.



