STEP 3 Action 2: Pay More Than The Credit Card Minimum Payment

It is important to do whatever you can to make more than the credit card minimum payment if you are really serious about debt elimination.
Even a small increase from the credit card minimum payment can make a huge difference.

Your credit card minimum monthly payment is calculated by the credit card company to make it easy for you to stay in debt. When you make the low minimum monthly payments you are paying off very little of the principal amount and chances are you will see your situation just getting worse month after month.

Here's an example: Many card companies charge about 2% of the balance as the credit card minimum payment monthly amount. A $1,000 charge on one of these credit cards will take almost 22 years to pay off, and will cost more than $2,300 in interest. That is a total of $3,300 in payments over 22 years for a $1000 debt if you make only the minimum payment each month.

Shocked? So were we the first time we sat and did the calculations.

We've seen in the last step (look here if you missed it) that most of us can find a few dollars to several extra dollars a day in money that we spend on "bits and pieces" - unnecessary items we don't even think of, that can really add up.

If you can find an extra $10 a day, or even $5, to put toward your increasing credit card debt, you will be amazed at how quickly it can make a difference. $10 a day added to your payment each month is an extra $300 a month and $3600 a year! You can see how much more quickly you can get rid of credit card debt by redirecting a few dollars a day.

If you take the example above, that same $1000 credit card balance will take just 4 months to pay off completely by paying that extra $300 a month. 4 months versus 22 years, quite the difference! You can see from this small example how short term pain really does produce long term gains.

Making every effort to pay more than the credit card minimum payment each month can help you get out of debt much, much sooner and is an essential ingredient to managing credit card debt.

What is the earliest date you can be free of debt? Use our Debt Payoff Calculator to find out.

Along with this tip to increase your credit card minimum payment, go to the next step in our Debt Ditch Solution    Managing Credit Card Debt

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