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| Friday, February 17, 2006 |
| Why you should understand your credit card debt |
I am at a point in my life where I pay off my credit card balances every month. I wish I could say that has always been the case and no credit card company ever made money off me. Wish I could, but can't. Like so many college graduates I left campus with a diploma AND hefty credit card debt (students loans as well, but not the point of this post).
I clearly recall my newly graduated self putting pen to notebook paper at my Mother's kitchen table jotting down expected rent payments (I really wanted to move out of my Mom's house - but that came later), my car payment, student loan payments, expected amount of pocket money needed, and the minimum payments for my credit cards. I then used that total estimated monthly number to figure out how much money I needed to earn. Yup, I used the minimum payment number on those cards. Not factoring in payoff amounts and certainly not budgeting for savings (or utilities, car insurance, gas money, T-pass, work clothes, etc., etc. - this being the reason it took me a bit of time before I moved out of my Mother's house).
The very idea of paying off the credit cards totally just was not something I thought about. So, once I moved out of my Mother's house, had my own condo, and was making a living wage I paid those cards off - right? Nope, six years after graduating, I was still carrying around credit card debt. It was not until I finally sat down with pen and notbook paper at my condo kitchen table and plotted out how long it would take me to pay that debt off that I finally wised up and stopped just paying "a bit over" the minimum and made clearing off that debt a priority.
Luckily, today you can use calculators or other online tools to easily see how long it will take you to pay off your credit card debt. This simplifying credit card debt widget does a good job of illustrating how long it will take to pay those cards off.
Understanding what that debt is costing you is the first step in really getting motivated toward paying it off. |
| posted by Boston Gal @ 2:45 PM *
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| 2 Comments: |
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What a great story. It seems like for most people it takes an awfully long time for them to acutally *make* the decision to pay of debt!
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Yeah, debt is a four-letter word. But I like using credit cards to get the free benefits. You know, the 1% cash back, airline miles, or casino points for freebies. Might as well, as long as one has the discipline to pay them off monthly.
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What a great story. It seems like for most people it takes an awfully long time for them to acutally *make* the decision to pay of debt!