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How You Trap Into Credit Card Debt


These days credit card or plastic money is very popular and used extensively. It is indeed of great utility if used in a calculative manner, but it is also the main cause that leads many people trap into credit card debt. Let see how it happen to most of people.

Many of retailers are implementing easy payment scheme for their products or services, with some fraction amount of money for monthly installed, you can buy thousand of dollars of items or go for a luxury vacation which you can't afford to buy if one lump sum of money is needed, these monthly installment are automatically charge to your credit card. Every month, you just pay the minimum amount of your credit card balance and you continue spend on your credit card. Let use a case study to review on how a person credit card debt can grow and how it will take to get rid of it.

Case Study

Scott earn $2,500 a month, he is holding a credit card with interest rates of 12%. All his credit cards allow him to pay a minimum of 3% or $10 which ever is higher. His credit card limit is $15,000.

Scott's credit card balance at current month is $4,550 ($3000 in principle and $1550 interest). He tends to pay the minimum of his credit card balance and each month he will averagely swipe about $500 on petrol and other utilities.

Let see how's Scott's credit card balance grow:

Month 1

Credit card balance = $4,550.00

Minimum Payment = $136.50

New Credit Card Spending = $500.00

New Balance = ($4,550 - $136.50 + $500.00) = $4913.50

Month 10

Credit card balance = $7976.02

Minimum Payment = $239.28

New Credit Card Spending = $500.00

New Balance = ($7976.02 - $239.28 + $500.00) = $8236.74

Month 20

Credit card balance = $11109.85

Minimum Payment = $333.29

New Credit Card Spending = $500.00

New Balance = $11109.85 - $333.29 + $500.00) = $11276.55

Month 30

Credit card balance = $13662.60

Minimum Payment = $409.88

New Credit Card Spending = $500.00

New Balance = $13662.60 - $409.88 + $500.00) = $13752.72

Month 36

Credit card balance = $14961.02

Minimum Payment = $448.83

New Credit Card Spending = $500.00

New Balance = $14961.02 - $448.83 + $500.00) = $15012.19

If Scott continues his practice, his will hit his credit card limit after 36 month compare to current month.

Let say Scott stop using his card with the balance at month 36 of $15012.19 and continue paying the monthly minimum. It will take him 228 months which equal to 19 years to just to pay off his $15012.19 debt.

The above example is just a simple case study to show you how your credit card debt may piles up so quickly without you even aware of it. You need a lot of time and spend a lot of money on interest in order to get rid of this debt. In real life, many people have more than one card and other loans to support; hence situation may even worse.

How to get rid of credit card faster & affordable?

If you are already at this situation, the first thing you need to do is to change your behavior of paying the minimum only. Paying more each month will definitely pay off your debt faster but the question is you may say that you can't afford to pay more than the minimum. In actually fact, the easiest, faster and affordable way to get rid of your credit card debt is maintain your current minimum monthly payment.

For example, we use back Scott's case. If he affords to pay the minimum payment of his $15012.19 debt, which is $448.83, this is his affordable payment. If he continues to pay $448.83 every month instead of the minimum of his credit card balance, he will need only 43 months to pay off his debt as compare to 228 months. This mean, Scott will have his debt free life in less than 4 years instead of 19 years.

In Summary

Credit card will remain important in many people life, use it intelligently for your convenient, but you much carefully manage your credit card balance, don't let this plastic money drag you into financial crisis; the ideal way is pay the balance in full each month.

Money Is_This_How_You_Make_It_


Title:

Money-Is This How You Make It?

Word Count:

650

Summary:

There are several methods to make extra money which you may not have tried yet. Most people have jobs and work for someone else, but there are many ways in which to be self-employed. It just depends on harnessing skills and knowledge you already have, and finding clients to pay you for them.

With their busy schedules, many families do not have time to make home-cooked meals. If you have cooking skills, advertise in your local paper that you will prepare food to order. If y...

Keywords:

making money, how to make money,how to become rich

Article Body:

There are several methods to make extra money which you may not have tried yet. Most people have jobs and work for someone else, but there are many ways in which to be self-employed. It just depends on harnessing skills and knowledge you already have, and finding clients to pay you for them.

With their busy schedules, many families do not have time to make home-cooked meals. If you have cooking skills, advertise in your local paper that you will prepare food to order. If you are dealing with a family or a small party, you can handle the job yourself and won't need any helpers. And who knows, as your client base expands, you may want to hire an assistant and become a professional.

If you are retired professional, think about working part-time from home. For example, an accountant could do income tax, and an ex-office worker can type student essays.

If you can't find a full-time job and have typing and word processing skills, think about applying to office temp agencies. The work can be irregular, but it pays fairly well.

If you have specialized knowledge, such as a trade or profession, write an e-book with tips the public can use. For instance, an electrician can write down simple steps to installing a light fixture; a nurse can advise middle-aged baby boomers on how to care for elderly, debilitated parents. With a tight economy, many people are trying to save money by doing household repairs themselves. Step by step advice on dealing with common household emergencies or car problems is useful to many people. Medical advice is extremely valuable, and there are many online books being sold successfully to help patients deal with common medical problems such as diabetes and heart disease.

Also, if you have a college education, think about tutoring students. You don't need a teaching diploma to help a grade-school child who is having trouble reading; often the most important skill in this instance is patience. If you know how to play a musical instrument, give music lessons.

If you have a website or are considering starting one, place Google Adsense ads on it. It will pay for the maintenance of the website at the very least, and if you get enough traffic, it can provide an extra income stream. Consider becoming an affiliate for other companies featuring products and services related to what you are selling. For instance, a website featuring autoparts could do affiliate sales for car companies and tire suppliers. These items would enhance your own website by expanding the available product line without detracting from sales of your own product.

People with no knowledge skills can often make money through doing physically tough jobs that unathletic or elderly people can't do. Washing windows, cleaning rain gutters, moving, landscaping and housecleaning can pay up to thirty dollars per hour, and are really no more demanding than the jobs offered for minimum wage, such as flipping burgers or waiting on tables.

If you own your own home, consider renting out the basement to students or pensioners. These are usually quiet tenants who will respect your privacy, and provide a steady rental income of up to several hundred dollars a month, depending on the size of the accommodations you have available. If you live in the country or some scenic area, it may be possible to run a bed and breakfast, but being an innkeeper takes more time and effort than renting to long-term tenants.

Many communities have free local bulletins which charge only nominal fees for advertising. Public bulletin boards are often available at the local mall. Create many copies of an ad briefly describing the service you are offering and how much you charge, with tear-off tags at the bottom with your name and phone number. Post the ad all around your neighborhood and you are bound to get a few replies.