97 Years to clear a credit card debt!

If you have built up debts on credit cards and store cards, you might be in for a surprise when it comes to finding out when you will finally clear your debts.

Most credit card companies charge just enough on the monthly repayment to cover the interest chargeable for that month. Only a fraction of the capital borrowed is paid off thus ensuring that you continue paying the interest for a very long time. On a statement i saw recently a ?5,848 pound balance was incurring a monthly payment of ?120.64. The interest charged for the month was ?115.64. This means that only ?5 was being put towards clearing the debt. At that rate, it would take 97 years to pay off the credit card debt, assuming that no additional cash was borrowed.

Most credit cards currently have an APR in excess of 16%. Store cards can be as high as 29%. If you have any of these, you would be well advised to consider refinancing all your credit card and store card debt into one cheap loan with one low monthly repayment. Not only will you save oodles of cash on interest, but you wont run the risk of missing any of your monthly repayments, and you will pay back the loan in a pre-determined time, say 5, 7 or 10 years or whatever term you choose to take the loan over.
Debt consolidation loans work. They can save you cash and increase your monthly disposable income.

And you won’t have the debt for the rest of your life!