Okay. Its time to pull out your credit card statement and take a look at your monthly interest expense. What you find might not be pleasant. We plugged some numbers into our balance transfer calculator to estimate the monthly cost of carrying a balance on a credit card with a standard interest rate. The results weren’t pretty. Check out these monthly and annualized expenses for people with $3000, $5000, and $10,000 in credit card debt.
We’ll start with $3000 in debt on a credit card with a 14% interest rate. Every month, this card racks up $35 in interest. While this may not seem outrageous, over the course of a year, the total interest expense nears $450. And that assumes the debt doesn’t go up.
Things start getting uglier when we increase the debt level to $5000. On a monthly basis, the interest expense crosses the $50 threshold, coming in at $58. While this isn’t ideal, the yearly cost is really striking: $746!. And $5000 is only about half of the average household credit card debtload.
Now, let’s look at the costs of $10,000 in debt. On a monthly basis, interest expenses cross into triple digits, coming in at just over $100. What’s frightening, however, is the yearly cost. It totals over $1,400. No matter who you ask, that’s a lot of money. And, its money that doesn’t have to be spent.
Although the credit crunch has made it more difficult for some consumers to get accepted for 0% balance transfers, it is still possible to get approved for one of these money saving deals. Unfortunately, however, the credit crunch may worsen, and the availability of these offers may dry up quickly. For those reasons, not to mention the fact you can save a few hundred or thousand dollars, the time to transfer balances to a 0% credit card is now.
You can review these offers in the balance transfers section of this website and apply online. You can also continue reading for some real nightmare balance transfer scenarios.
Nightmare #1: $10,000 in credit card debt with a 17% interest rate
- Monthly Interest Expense: $142
- Yearly Interest Expense: $1839
Nightmare #2: $15,000 in credit card debt with a 15% interest rate
- Monthly Interest Expense: $188
- Yearly Interest Expense: $2411
Nightmare #3: $20,000 in credit card debt with a 15% interest rate
- Monthly Interest Expense: $250
- Yearly Interest Expense: $3215
These scenarios are not uncommon across America, and with high interest rate credit cards, debt can quickly spiral out of control. With an interest rate of 14%, debt can double in as little as 3 years. And, as we all know, its much easier to get into credit card debt than it is to get out.
Our advice is simple: don’t let your credit card debt get out of control. Consolidate high interest credit card debt onto a 0% APR balance transfer credit card and pay down your debt before its too late.
