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With consumer debt at an all time high it's time we take control
of our finances and get out of the "debt trap". Do you realize
that if you owe $2,000 on a credit card with a 21% interest rate,
and you only make the minimum payment each month that you will
owe on this account for approximately 19 years and pay a total of
$6725.64 in principle and interest?
If you are tired of straining under the pressure of debt, take
the following steps and remove this burden in a fraction of the
time.
1. No more charging. Commit now to discontinue the use of credit
cards. In fact cut up the cards that you have, call the companies
and close the accounts. If you have to have a credit card for
work try a debit card (they are widely accepted, and the funds
are pulled directly from your checking account).
2. Figure your monthly minimums for each of your debts and (if
possible) add 5% or 10% to this number. The addition is not
mandatory but will dramatically improve the success of the
program.
3. Promise to make the above-mentioned payment from now until the
debts are completely paid off. This means that even though the
minimum payment requirements will go down over time you will
still make the same payment. This also means that when one card
is paid off you will still make the same payment. Just apply the
extra funds to one of the other debts.
That's it, just three easy steps. Now I realize that the
emotional commitment to make this plan work may not be all that
easy, but let me give you something to think about. Remember that
$2,000 debt? Yes, the one that took 19 years to pay off. Using
this program (without the additional 5% or 10%) we will pay this
debt off in about 8.5 years and save approximately $2,387 in
interest.
Need a little more motivation? If you were to invest that same
monthly payment (the one we were making on the $2,000 debt) at
the end of the 8.5 years for the next 10.5 years (you remember,
19 years total) at a return of 12% you would have approximately
$10,682.
Interest is a magical tool. Your creditors use it to their
advantage all of the time. It can also work in your favor if you
properly implement the right program to harness it. If you take
the steps mentioned above it won't be long before interest is
working for you instead of against you.
(c) 2000 DebtGuru.com
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