The average American household with at least one credit card has nearly $15,950 in credit-card debt (in 2012), according to CreditCards.com, and the average interest rate runs in the mid- to high teens at any given time."
At 15% interest, interest charge for $15,950 in credit is $196 a month.
(The calculation is (.15 (15% APR) / 365 ) or .00041 * 15,950 = $6.5333 a day in interest, or $196 a month.)
This is money that provides no utility. And often the goods that were purchased with the credit card are depreciating in value as you accrue interest on the debt.
Credit card interest is a complete waste of money.
One way to reduce credit card interest is by taking advantage of balance transfers. Often credit card companies will offer a promotional rate, sometimes 0%, with an upfront transaction fee, when you transfer balances from credit cards with higher interest rate. Creditcards.com lists the best offers of over 1,000 they analyzed.
In this blog post, Andrew Rombach from lendedu goes into detail on balance transfers.
A quote from Andrew's post:
In this blog post, Andrew Rombach from lendedu goes into detail on balance transfers.
A quote from Andrew's post:
For example, let’s say Joe owes $10,000 on a credit card, and the card charges 15.99 percent interest. Joe’s minimum monthly payment is $232, and he wisely doubles it to pay $464 a month to pay it off faster.
It would take Joe 26 months to pay off the debt, and $1,867 of those payments would go to interest.
Now, let’s say Joe transferred the $10,000 balance to a card offering 0 percent interest for 15 months. He decided to pay twice the minimum monthly payment again. He pays the card off in 22 months and only $162 of that goes to interest. This makes financial sense.Please check out the full article here.
Before we created MyMoneyPicture, I considered other budgeting applications. Many requested access to log into my financial accounts to automatically transfer spending information to the application.
That was unacceptable to me. Not only did I see it as a huge security risk, but by making the recording of expenses automatic, it reduced my personal involvement. Personal involvement is instrumental in reducing thoughtless spending. And thoughtless spending was the major issue keeping me from the financial freedom I desired, as it is for so many people.
With MyMoneyPicture, you decide how to name your accounts. You can name them something generic, but meaningful to you, like "visa", "credit card" or "checking" or even "account one". MMP does not access your accounts, or request or store account numbers or login information. And you only enter information for the accounts you wish to track.
Reducing debt, especially credit card debt, is a priority for anyone who desires financial freedom, and MyMoneyPicture is committed to helping you achieve this goal.
