Why It's a Bad Idea to Tackle Your Credit Card Debt By Only Making Minimum Payments
Bankruptcies | June 16, 2016
If you have recently lost a job, and you have bills piling up, there are solutions. Whether you have recently started missing payments, or you are months behind, trying to pay off credit card debt can get overwhelming fast. When you are inundated with calls from bill collectors and you are only able to make minimum payments, you have to make a change.
Why Making Minimum Payments Doesn’t Work
Does it feel like you are constantly making payments to credit card companies but your debt continues to rise? In order for you to pay off a $2,000 debt at 18% interest by only making minimum payments, it will take you roughly 370 months, or a whopping thirty years, to pay off the debt. When you only make minimum payments, you will pay more than one and a half times the original debt in interest payments. So while minimum payments may seem like a viable short term solution for saving you money and helping protect your credit score, in the long run they’ll get you nowhere fast.
Monthly Payments Offer No Long Term Resolution
While it can be tempting to only make the minimum payments on your credit cards, if you are able to pay more, then you should. Otherwise, your balances will continue to grow and you may have an even harder time paying off your credit card debt in the future. Credit card companies will see that you are overextended, and it will be difficult for you to get any other type of credit in the near future. This can become difficult when you need to buy a house or finance a car, and you have no means in order to do so.
If you are in need of credit card debt relief, or if you have been considering filing for bankruptcy, now is the time to schedule a free initial consultation with an experienced attorney at Morgan & Morgan. Together we’ll discuss your current debt, and the potential benefits of filing this very common proceeding.
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