Using Credit Cards Interest Calculator to Settle Debt Faster
Are you in card debt, use credit cards interest calculator to have an idea how much it will cost you to settle the debt.
Many cardholders are burdened with card debt because of indiscriminate use of their credit card, without considering the consequences of huge interest fees on the balance.
Mostly, card users opt to pay only the minimum payment due on their debt balance without understanding how long it will take them to settle the debt and how much is the corresponding interest of the loan.
How the Minimum Payment of Credit Card Works
As a credit card user, you need to know what a minimum payment is and understand what it has to do in settling your credit card debt.
The credit card debt’s minimum payment is calculated as a percentage of the current balance or all interest with an additional 1% of the principal. Card companies set a low limit in the minimum payment. This means that the minimum payment should not fall below the fixed amount.
The minimum payments lessen as the balance is being paid. However, it will take a long time to pay the loan, if you will only be paying the minimum.
With the use of credit cards interest calculator, you will be able to know how long it will take to settle the loan and the related interest payment.
You can also make intelligent decision on how to manage your credit card debt and to settle it at a lesser time.
Taking Advantage of the Credit Card Calculator
Financial experts advice that cardholders should refrain in having loans using their credit card as much as possible, unless the interest rate is zero or low.
It is customary with card issuers to charge a high rate of interest. Often, they encourage you to pay only the minimum of the loan balance every month.
With the use of credit cards interest calculator, cardholders will have the opportunity to know the period in which he will be settling the loan.
As an example, assuming you owe $2000 with a 17% APR, and the minimum payment at 2% of the balance. The calculator will tell that it will take you 137 months to settle the loan, and the interest payment will total to $2342.
At the final analysis using the credit cards interest calculator, it is advisable that cardholders should pay more than the required monthly minimum payment in order to lessen the period of the debt settlement and save on interest fees.
Ways to Lessen Credit Card Debt
- Consider Low Interest Credit CardsUsing credit cards with low interest rate is advisable if you choose to forward credit card balance. You will be charged with lesser interest and be able to pay more on the principal amount. In this way, your debt will be settled faster.
- Utilize Zero-Percent Balance Transfer OffersMany credit card issuers offer zero-percent on balance transfer. You can maximize savings from interest payments by transferring your credit card balances with high interest. This will give you the opportunity to concentrate payments to settle the principal debt instead.
Credit Cards Interest Calculator is a great tool to help cardholders understanding their position related to credit card balance, and make wise decision in getting out of debt.