We enter the holiday season and for most of us, “stuffing” to coin the phrase, seems to be the best time of the year. Whether we are “stuffing” turkeys; “stuffing” stockings; or most of all “stuffing” our credit cards with more debt than we can handle, we need to get a handle on our spending habits. For example, did you know that the majority of unsolicited credit card applications are mailed out between October 15th and December 15th every year? That my friend does not happen by accident. According to industry analysis, the mailing of unsolicited credit card offers is 10 time higher during these two months than at any other time during the year. Why is that do you suppose?
Banks and credit card companies are in the business of making money, and they making more profits than ever before on credit card debt. To keep up, many Americans (if they can) are working two and sometimes three jobs a week, not only to stay afloat, but to pay off their credit card bills as well. In addition there does not seem to be any end in sight for these folks.
How could there be when these banks and credit card companies are charging 18%, 25%, or even 36% in some instances. We did some quick calculations for you just to give you an idea of how much time and money it would cost you to pay off $5,000 in credit card debt, if you paid the minimum monthly payment each month, AND DID NOT USE THE CARD EVER AGAIN!
• If you owed $5,000 to a creditor, and paid them the minimum monthly payment of $100.00/month, at 18% interest rate, it would take you over 30 years to pay this off. In addition, you would have paid a total of $17,556.38 ($12,556 would be interest)!
• If you owed $5,000 to a creditor, and paid them the minimum monthly payment of $100.00/month at 25%, it would take you over 30 years to pay off this off. In addition, you would have paid a total of $48,992.59 ($43,992 would be interest)!
• If you owed $5,000 to a creditor, and paid them the minimum monthly payment of $100.00/month at 36%, it would take you over 30 years to pay off this off. In addition, you would have paid a total of $540,077.67 ($535,000+ would be interest)!
We use these examples realizing they are extreme, however not really of you look at the interest rates you are paying to your creditors and the amounts you are paying them each month. How many of you truly look at your statement(s) each month and realize what interest rate you are paying? It is no wonder why you cannot seem to get out from under your credit card debt.
Advertisers are pretty smart folks as well. For example, twenty years ago a cell phone was just something basic to communicate with. Now tell me what you pay on a monthly basis to “keep in contact” with your friends while “playing games” on your cell phone. What is that costing you? Do you pay your bill each month with your credit card at 25% interest? Just asking? Do you know?
We point these examples out to you not to scare you, however so you will become more aware of where you are spending money and how much you are paying for that money. In addition, if you “stuck” in what we refer to as the debt trap (making monthly payments, but getting nowhere close to getting out of debt) there is a solution! The first solution is the most obvious; ‘Never spend more than what you have’. Sounds simple, however we live in a self obsessed society that tells us we have to have the latest gizmo or gadget now, no matter what the cost.
Our solution is to help guide you through a debt settlement or debt negotiation program, whereby professional advisors negotiate and settle all of your unsecured debt down to a fraction of what you currently owe. The question is, once we do get your debt down to $0.00, yes ZERO balance, do you have the stamina to stay debt free?
No more “stuffing” this season or any other season. Just be free from owing anybody anything!