Credit Card Debt Essay

Published: 2020-02-13 09:41:44
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1. My Introduction with a credit card balance of $5,270.00 and an (APR) of 15.53 percent based upon my own conclusions and assuming there are no other fees are applied. In my report I took my balance of $5,270 x 15.53%= $818.431. The Maximum monthly payment would be $5,270.00+818.43= $6,088.43. Took get this I take the balance + total interest = Total balance. So to get the minimum monthly payment take $6,088.43/12=$508.00 minimum monthly payment. 1. The amount of interest $818.43 the amount of interest less the amount applied to reduce the principal which is $5,270.00. So you take the amount of interest $818.43 -$508.00 = 310.43 the amount to reduce the principal. I have inserted a pie chart to show my examples.

5270| Total Balance| 5270|
818.43| Total Interest| 818.43|
6088.43| M. Balance| 6088.43|

This pie chart above shows Total balance + Total interest = Balance.

2. The balance of my credit card is $535.07, my minimum monthly amount is determined by Payments, purchases, cash advances, past due amount, and interest charged. My minimum credit card payment is $53.00. The amount of my minimum monthly payment that goes towards interest is $11.36. The minimum monthly payment that goes toward the principal is $ 41.64. The actual amount of my credit card is 1,786.00. 3. The terms of my credit cards or other revolving debt that the credit card company is applying to my account are Transfer fees, late payment fees and cash advance fee if cash with drawls exceed the principal balance. I am not receiving any special rate or no annual service charge for inactivity fee for not using my card. 4. The steps I can pay of my credit card debt off sooner are

Using my card each month to use the minimum | Pay off my $1,786.00 balance| End up paying an estimated total| $53.00 minimum payment| 8 years| $2,785.00|
$62.00 New payment| 3 years| $ 2,232.00 (553.00 savings).|

The chart above shows my credit card balance and it also shows my minimum payment and the years it would take to pay off my balance. To show how I got my estimated total my credit card interest rate is 29.99%. I took my total balance of $1,786.00 x 29.99%= $463.00 is my total interest. So in about 7 total years 2322.00 x 463.00= 2785.00 total balance should be paid off. 5. The advice I can give concerning the use of credit cards and the fees they charge would you provide to a young adult planning on getting a credit card I would tell them that credit cards is good to have for emergencies (ask ville2013). Most teens manage to get through those years without permanent damage.

If they dont, it is generally because of three things: addiction to tobacco, substance abuse or alcoholism and misuse of credit cards (ask ville2013). In my conclusion many credit card companies are targeting the consumers with not so good credit and offering their rates so high that it will take those years to pay the balance off. Consumers should only use credit cards for emergency purposes only. Also consumers should also think about paying off the interest off early as possible. For routine purchases you can use a debit card, which draws money directly out of your checking account. When there is no more money, the card stops working.

References:
http://askville.amazon.com/advice-give-young-person-credit-cards/AnswerViewer.do?requestId=4858365- Retrieved January 25, 2013.

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