The Danger of Minimum Payments
When you only pay the minimum balance on your credit card, you're mostly just paying off the interest you've accrued that month. Very little of your payment goes towards the actual principal balance.
This can lead to your debt lasting for decades and costing you several times the amount you originally borrowed. Use this calculator as a wake-up call to pay down your high-interest debt faster.
Strategies for Debt Freedom
- Pay as much as you can above the minimum each month
- Use the "Snowball" or "Avalanche" method for multiple debts
- Consider a balance transfer or debt consolidation loan for a lower rate