Manage Your Money

Master the skills that can help you manage money throughout life.

Higher Payments = Quicker Payoff

Pay more now, you'll pay less in the long run

If you only pay the minimum amount on your credit cards (about 2 percent of the outstanding balance or $10, whichever is higher), you'll be paying a long time. Also, you'll end up paying more because of accumulating interest charges. The table below demonstrates how much faster you can pay off your credit card debt when you increase your minimum payment to 10 percent of the monthly balance. Also, if you make more than the minimum payment, you not only pay off your credit card sooner, but you save money in interest charges.

Years to Pay Off Credit Card Debt
Balance $1000 $2000 $3000 $4000 $5000
Interest Rate 2% payment1 10% payment1 2% payment1 10% payment1 2% payment1 10% payment1 2% payment1 10% payment1 2% payment1 10% payment1
10% 10.4 3.0 15.3 3.6 18.3 3.9 20.3 4.2 21.8 4.3
11% 11.0 3.0 16.3 3.6 19.4 3.9 21.6 4.2 23.3 4.4
12% 11.7 3.0 17.4 3.6 20.8 4.0 23.2 4.3 25.0 4.4
13% 12.4 3.0 18.7 3.7 22.3 4.0 24.9 4.3 26.9 4.5
14% 13.3 3.1 20.2 3.7 24.3 4.0 27.1 4.3 29.3 4.5
15% 14.3 3.1 22.0 3.7 26.5 4.1 29.7 4.3 32.2 4.5
16% 15.6 3.1 24.3 3.8 29.3 4.1 32.9 4.3 35.7 4.6
17% 17.3 3.1 27.1 3.8 32.9 4.2 37.0 4.4 40.2 4.6
18% 19.3 3.2 30.9 3.8 37.6 4.2 42.4 4.4 46.1 4.7
19% 22.3 3.2 36.1 3.8 44.2 4.2 * 4.5 * 4.7
20% 26.4 3.2 43.7 3.8 * 4.3 * 4.5 * 4.8
21% 33.2 3.3 * 3.9 * 4.3 * 4.6 * 4.8
22% 46.1 3.3 * 3.9 * 4.3 * 4.6 * 4.8
23% * 3.3 * 3.9 * 4.3 * 4.7 * 4.8
24% * 3.3 * 4.0 * 4.4 * 4.7 * 4.9
25% * 3.3 * 4.0 * 4.4 * 4.8 * 4.9
26% * 3.3 * 4.1 * 4.5 * 4.8 * 5.0
27% * 3.4 * 4.1 * 4.5 * 4.8 * 5.1
28% * 3.4 * 4.2 * 4.6 * 4.8 * 5.1

 

1 $10 minimum payment in effect if 2% of balance drops below $10. A $1 minimum finance charge in effect if finance charge calculates below $1.

* Not in this lifetime! At these rates, payment exceeds 50 years and in many cases, interest eventually becomes greater than the minimum payment.



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