For the past little while money has been on my mind. I want this year to be the year that I focus on saving, growing my emergency fund, completely getting rid of debt and investing more than I ever have before. So far its going really well. The other day I was reading up and learning about credit card debt and stumbled about a very simple detail that got me super excited.
Did You Know…
…in Canada, banks are required to disclose on the monthly credit card statement, the estimated length of time it would take to pay off a credit balance if only the minimum amount is paid?
Credit card debit is one type of debt that could very easily complicate your financial life yet just a little strategizing could help to avoid it. We’ve heard it all before, pay your balance in full, only use your credit card for purchases you can actually afford and so on. These are great tips but somehow many people don’t seem to follow them.
While listening to a podcast a few weeks ago I learnt that banks are mandated to tell their clients the estimated time it would take to clear credit card debt. I talked to a few of my friends and they did not know about this. So I figured perhaps I should share it on the blog.
If there is a balance on your credit card that you do not pay in full every month, you might want to look at your credit card statement.
That should scare you.
A credit balance of $8,000 for example is estimated to take more than 64 years to be paid in full if making only the minimum required payment at a 20% interest rate. If you needed motivation to clear that balance, there you go.
It might not be easy to make the payment in its entirety right away, but I suggest you create a payment plan and start working on it.
Credit Card Debt; Call to Action
- Pay your credit balance in full
- Check your credit card statement to get a better picture of how long it would take to clear your balance when paying only the minimum payment required.
- If you are unable to pay the whole amount now, create a payment plan and a time frame to pay it off -and stick to it.
Best wishes, and feel free to share your credit card debt stories in the comments section below.