Are You Giving The Bank Thousands of Dollars Every Year By Making The
Minimum Payments?
Most people don’t realize how much money it cost them by making just the minimum payments on their
high interest credit cards. If they did a sense of shock would set in upon realizing just how much money was
being lost. On this page I am going to show you how much money can potentially be lost by just sticking with paying
through the minimum payment. Once you have a full grasp of the situation you will see why debt settlement is
something you can't afford not to do if you are in debt. Once you see the comparison of how much money it
would take to satisfy your creditors through debt settlement, as compared to paying the minimum payment the
creditors would like you too you are going to be quite surprised. I will also show you a location where you
can see exactly how much money you personally are losing on your credit cards and other
unsecured debts with interest using a minimum payment structure.
Read Carefully Below
For this example we are going to use someone who is in debt $10,000. Pay attention to the length of time and
amount of money paid in interest. If you owed $10,000 on your card, had an reasonable interest rate of 8%, and had
your minimum payment structured at 2.5% of your balance. If that was your situation and you stuck to the minimum
payment you would be in debt for 213 months, which divides into 17.8 years. You also would have paid $2,978 in
interest. That is enough time for your child to go from birth to his/her high school graduation, can you imagine
having to pay one credit card bill that long and with no financial gain. The amount you paid in interest is way
more than enough for an amazing family vacation at Disney World. Now if you think that situation is bad read below,
because most people aren't lucky enough to be stuck in the situation above.
If you are like most people financial problems occur at some point in your life whether you are a young college
student serving tables for a living, or a 40 year old parent raising a family. Financial problems occur this is
just part of life. Once this happens you really begin to prioritize what bills need to be paid on time. For most
people it goes something like this mortgage/rent, car loan, utilities, food, than maybe money for your unsecured
debt such as credit cards and loans. Unfortunately your creditors aren't very fond of putting off paying them.
Whether you are a brand new customer or a 20 year credit vet with more miles and points than you know what to do
with, if you fall so much as one to two months behind they will reward you with the default interest rate which can
range from 2833%. When this happens your debt situation has gone from poor to down right horrible.
Now that you are stuck with the default rate lets see what that same $10,000 debt will cost now. Using the exact
same numbers as the example above except for changing the interest from 8% to 28% look at the time and money lost
now. Paying that debt through the minimum payment will keep you in debt for 2,047 months, which divides into 170.5
years. The interest you would pay would be $135,141.27. That is enough money to buy a brand new house for your
family, but instead you gave it to your creditor through interest and the minimum payment. And the amount of time
it would take to pay off the debt is almost two centuries.
Has that information above begun to sink in? Now lets take that same $10,000 debt and see the time and
money saved using a reputable debt settlement law firm to settle that account. Typically you can save 40 to
60% of the original debt in one to three years. Then take into consideration the amount you would of payed back in
interest through minimum payments. At the 8% interest rate the total is $12,978.27. Using debt settlement at a 40%
savings of the original debt that would be $6,978.27 saved vs. minium payments. Paying back through
miniuim payments would take 17 years! Now lets compare the savings of debt settlement if you were at the default
rate of 28%. You would have saved $139,141.46. The $4,000 once again from the balance and the $135,141.46 you would
of saved in interest. Again with debt settlement you would only be in debt for 13 years vs. the 170 years paying
the minimum payment with an interest rate that high.
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