Credit Card Debt is a BIG Problem

Credit, in and of itself, is not an evil thing.  But ...
Problems occur when credit becomes long-term debt!

Credit Cards are one of the most expensive ways to purchase goods and services and feature Annual Percentage Rates (APR) as high as 25%, with an average APR of 18% to 22%!  How high are your interest rates?  What are your repayment terms, in years (eg., 60 to 84 months on a car loan)?

Credit Card Company payment plans are designed to maximize the time required to pay off the debt and earn credit card companies an outrageous income from interest charges!

To pay off a $2,500 debt using a Credit Card payment plan could cost you nearly $5,900 in interest charges! 

Minimum monthly credit card payments are often as low as 2% of the debt balance . . .

This may keep your monthly payments affordable, but it will also greatly increase the interest charges you pay, and really lengthen the time required to pay off your debt!  Don't believe us? Read the fine print on your statement.

Credit Card Company payment plans reduce your minimum monthly payment as your balance is paid down further extending your payoff date of the debt.  This tactic increases the interest charges you pay!

Credit Card companies "reward" card holders by increasing credit limits. This encourages card holders to spend more, while larger consumer debts earn more interest income for the credit card company!

Pay twice the minimum monthly payment, and the Credit Card company will often let you skip the next payment. This allows the credit card company to earn the maximum interest income on the remaining balance.

How Serious is the Credit Card Debt Problem?   The average American has 7 credit cards, owing an average of $2,500 per card. 60,000,000 Americans charge an average of $6,000 on credit cards every year.

How Serious is the Personal Debt Problem?  About 40% of all fixed-term Home Equity Loans are used to consolidate, or pay off, personal debt!  The average amount of these loans is $25,000.

It's estimated that MORE than $385B is owed to Visa, MasterCard, Discover, and American Express Optima!

Consumers are adding about $5B to credit card debt every month. That's about $173M  per day! This figure is absolutely enormous!  Meanwhile, consumers are sacrificing their future for today's pleasures.

Personal bankruptcies have gone from 300,000 in 1984 to about 1.1 million in 1996.

In 1999, 1.3 million Americans filed for bankruptcy!  In 2003, 1,625,813 Americans filed for personal bankruptcy; whereas, 36,1183 businesses filed bankruptcy.  Newspaper articles abound with news on how more and more homeowners are walking away from their mortgages, loans, and other debts.

On a typical consumer debt of $25,000, you could make minimum monthly payments for 479 months, well over 30 years.  You would pay a whopping $29,890.60 in interest charges before retiring the debt!

Final Note of Caution: Beware of advertisements that make statements like "No Interest or Payments Until Next Year!"  This RARELY means what it says. Although you may not have to start making payments on the principal or interest for several months, the interest charges will most likely be accumulating during that time and will be added to your principal.  Read the fine print carefully and you will find out the truth. This is just another way for companies to get more money out of you.

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