The Cost of Credit Card Debt
The Cost of Credit Card Debt According to the Canadian Bankers Association, as of October 31, 2013, there were 76.3 million Visa & MasterCard in circulation. That means the average Canadian consumer has 2 of these products and that does not even include all of the retail and other credit card products. Of the cards in circulation, 30.2 million carry a balance each month.
The statistics show that 70% of consumers pay their balance in full each month and pay no interest; but what about the other 30% of consumers who carry a balance? How much interest are they paying each month and how long will it take them to pay off their credit card debt?
Most credit cards require that you make a minimum monthly payment equal to 3% of your outstanding balance. Using the average credit card balance of $3,630 your monthly payments would be $109. If you stopped using the card today and made only the minimum payment each month it would take you 18 years to pay it off and cost you $3828 in interest – WOW! Now just imagine what it would cost a person who has several credit cards.
If you are struggling to keep up with credit card debt and don’t see your balances decreasing this is a sign to seek professional help. A Licensed Insolvency Trustee (LIT) can review your financial situation and help you find the best strategy to deal with your credit card debt.
For a free consultation over the phone or in person in Saint John, Moncton, Fredericton, Charlottetown or Dartmouth, please contact us. Powell Associates Ltd. is a Licensed Insolvency Trustee (LIT) focused on providing debt settlement, proposal and bankruptcy solutions for individuals and businesses.