How Long Are You Really Going to Be in Debt?
Presently, it could take up to 11 years at the least, to pay off a standard credit card debt …
Australians owe 38 billion dollars on their credit cards. The average person owes $4900 and paying back the minimum can mean that it takes 11 years to pay off your debt, with mmuch of that being interest.
Have you sat down and worked out how long you’ll be in debt?
While many debts such as car loans and home loans have a fixed term on them, credit card debt is one of those areas where people tend to focus on making the minimum payment without thinking about how long it will take to pay off the card.
Often, it’s a lot longer than you think.
There are a few things you can do to speed it up:
- Don’t just pay the minimum—repay however much you can afford.
- Don’t use your credit card for new purchases. Only pay with your savings.
- Automate your credit card repayments so there’s no temptation to ever forget or skip one.
- Pay off your highest interest rate cards first and shop around for ‘balance transfer’ offers from other credit card providers.
If the debt is too high, think about entering a debt agreement or other private arrangement with your lender to help you cope with the repayments.
However it’s not just credit cards that keep people trapped in debt. New car loans, loans on TVs and furniture, student loans, mortgages and holiday loans can leave many us stuck in a long pattern of debt.
It’s just important for us all to switch from focusing on those minimum monthly payments to realising how long we’ll really be in debt—and whether it’s worth it for the things we’re getting.