The Holidays are finally over! No more surprise dinners out or presents to buy. But you may be left with a hefty balance on your Card – how did that happen? Say it’s around $2,000 in credit card debt. Thankfully the minimum payment is only $38. You can afford that, right? Well…Before you write that check or make the payment online, consider this: If you make only the requested payments on that debt, your toddler will be entering high school before the balance is zero.
Here’s how it works: Most creditors require one to three percent of an outstanding balance as the monthly minimum payment. For $2,000, the average would be $40. But if you only pay the minimum, the interest adds up and increases your total balance over time.
You can avoid wasting precious time and money by disregarding the requested payment on your statement and using the "consistent payment method” instead. The process is simple and efficient:
1. Determine a realistic and fixed amount you can pay each month
2. Declare a moratorium on using the card until the balance is repaid
3. Pay more when you can – but never go under your preset amount
How much can this method possibly save you? Plenty. If you can manage $80 every month, you will repay the debt in 7.5 years, cutting off 10 years, with a final payout of $2,821.52. (You can use our online financial calculator for easy computations) Expedite the process even further by lowering the interest rate. How can you lower the rate? Simple, by opening a credit card with a balance transfer offer. Check out ASI’s Balance transfer offer for 2019, which is just 5.99% *for the life of your balance*. Check out the details here.
Now you can celebrate your savings with a nice—and affordable—night in.