How much do you really understand about your debt? You might look at your billing statements each month and notice your balances inching down, but that doesn’t mean you truly understand the impact of what’s going on or why you’re not paying your debt faster. Using CNN Money’s free credit card payment calculator, you can get some valuable understanding about what’s going on with your debt. All you need to do is plug your debt numbers in the calculator and evaluate different payment scenarios.
The Impact of Paying the Minimum
You’ve probably heard that paying the minimum on your debts is extremely costly – more costly than any other type of payment plan. To find out how costly, put your balance, interest rate, and minimum payment in the CNN Money’s calculator and choose the minimum payment plan option. You’ll see that it’s going to take several years and lots of interest before your debt is finally repaid. You can save hundreds, maybe even thousands of dollars, by increasing your monthly payment.
Save Money By Paying More
It sounds counterintuitive that you can save money by paying more money, but test it out. Use the calculator to see how much time and money you’d save paying off your debt if you increase your monthly payment by $100. In the fixed payment section, enter your current combined minimum payment plus an extra $100 and calculate. The result will undoubtedly surprise you.