Do people really spend more with credit cards than with cash? This topic has been beaten until blue and there seems to be no documented study which proves one way or another. Yes, many of us have heard of the Dunn and Bradstreet study (oft quoted by Dave Ramsey) that indicates people spend 12-18% more when using credit cards, but evidently, according to Money Myths and the Importance of Thinking for Yourself at Get Rich Slowly, that study hasn’t exactly ever happened. [click to continue…]
Did you know that making your minimum credit card payment every month will take you as much as four times longer to get rid of debt than making a fixed payment? I recently ran across a nifty calculator at Bankrate.com that I recommend looking at. When I plugged in $5,000 debt at 12% interest with a minimum payment of $100 I was shocked to learn that this $5,000 was going to take 259 months to pay off! The same numbers on my financial calculator showed only 70 months for a pay off. “OK”, I muttered, “What goes?”
Make sure you read the fine print about minimum payments
photo credit: TheTruthAbout…
Question: Obviously, something was haywire, but what was it?
Answer: I didn’t understand how minimum payments are figured.
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