Credit Card Debt Credit card debt is one of the most common forms of debt in the United States. It starts with promises of free vacations and 0% interest rates and quickly turns into ruined families and lives. Here are some quick facts about credit cards from a 2004 study on credit card debt by consumersunion.org.
- Revolving debt (most of which is credit card debt) ballooned from $54 billion in January 1980 to over $735.3 billion in October, 2003. Recent estimates indicate numbers well exceeding $1 trillion.
- The average household with debt carries approximately $18,654 in total revolving debt and has approximately nine cards.
- If you were to make minimum payments at the very low average 12.4% APR (many consumers pay much higher penalty rates than this FRB-reported average), you would pay $1,175 in interest just in the first year, even if these cards are cut up and not used again.
- You would pay a total of over $9,800 in interest over a period of 25 years and
three months.
- A household or consumer who merely doubled their minimum payment and paid 4% of the
amount due would fare better. A household or consumer that paid 10% of the balance each
month would fare much better. Here is a comparison:
| Minimum Payment Warnings Would Encourage Larger Payments and Save Consumers Thousands of Dollars In High-Priced Credit Card Debt |
| Credit Card Debt of $10,000 at Modest 12.4% APR |
Monthly Payment (% of unpaid balance) |
| 2% |
4% |
10% |
| First Year of Interest |
$1,175 |
$1,054 |
$775 |
| Total Interest Owed |
$9,834 |
$3,345 |
$1,129 |
| Months to Pay |
303 |
127 |
52 |
| Years to Pay |
25.3 |
10.6 |
4.3 |
If you are looking for debt relief and are finally ready to take that step towards financial freedom, please fill out the form to the right and we will work with you to reach your goals. In some cases we can even reduce your overall debt up to 60% up front through debt negotiation. You have nothing to lose besides continuing to give away money to your creditors through minimum payments.
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