The Burden of Credit Card Debt
Each year, more and more Australians get into trouble with credit card debt. Credit cards are convenient and allow people to buy things before they actually have the money to pay for them in hand. This can be a very dangerous way to spend money, though, because credit card interest rates are usually the highest of any type of credit, much higher than car loans or mortgages, and up 50 times higher than the rate banks pay on savings accounts.
You need to keep track of your credit card debt, and the easiest way to keep on top of it is to use a credit card debt calculator. A credit card debt calculator will help you figure out how long it will take to pay off your debt or how much you will need to pay each month to eliminate your debt. It will help you make sound financial decisions and improve your credit score.
How Does a Credit Card Debt Calculator Work?
First, you enter your credit card balance (the amount you owe) and your current credit card interest rate into the calculator. Then, you decide how you want the calculator to decide your payments. If you want to know how long it will take you pay off your debt by paying, say, $80 per month, and then you enter “payment per month” in the credit card debt calculator. If, on the other hand, you know you want to be debt-free in two years, enter 24 months into the “number of months” box.
The credit card debt calculator will then tell you either how long you will be paying off your debt or how much you need to pay each month. This can really help you to schedule your payments and get an idea how heavy your debt burden is. Let’s say you owe $3,600 and have a 17% interest rate. Using the credit card debt calculator, you’d see that you would need to pay $179 each month to pay your debt off in two years; if you paid $75 a month, it would take you almost 7 years to pay off your debt.
Why You Need the Credit Card Debt Calculator
For someone who makes $30,000 a year, a credit card debt of $3,600 may not seem like much. However, once you consider interest payments and penalties, this debt could easily cost you $200 per month to pay off, if you don’t want to carry it on your credit report forever. By using the credit card debt calculator, you’ll be able to get a realistic idea of what your credit card debt means to you. It will show you manageable numbers that mean something to you.
It can also help you plan to get out of debt, based on how much you can afford to pay each month. One of the most difficult parts of getting out of debt is figuring out the ideal way to do it, and learning exactly how your debt will affect you. The credit card debt calculator can help you do both of these things in just a few minutes.Back to top