Credit card minimums leave you in debt for nearly 50 years on clarkhoward.com

MONEY-SAVING MOMENT: Beginning next month, when you open your credit card statement, there will be a new box accompanied by the following wording: "If you pay the minimum payment above, it will take you XX number of years to pay off your balance."

When people see this -- if you pay attention to it -- Clark hopes that it will have a major effect on your behavior.

Ever heard of the mirror trick in dieting? This is a behavior modification technique where you kill your appetite by watching yourself eat in a mirror. The consumer champ hopes the new box on your statement will be your proverbial mirror.

A reporter for The Financial Times of London crunched some numbers and found that the typical American with an average balance and interest rate making only minimum payments won't be out of debt until 2058! And that's never charging another penny again to that card!

Now that you have the knowledge, Clark wants you to act on it. Pay down those cards quicker. You can find payoff calculators at DinkyTown.net and elsewhere on the web.

What others are saying

I can't wait to see how small they make that wording. I'd also like to know how many people will actually read it.
By TheJackal @ 02/05/10 08:05:49 AMreport abuse
Make it work for you
Discipline is all it takes to use a credit card wisely. Having a credit card does NOT mean you have the money to buy everything you want. It gives you the means to put yourself into serious debt.

Card card issuers make their money off of morons - don't be one of them. If you cannot pay your monthly bill in full every month - cut up your card and do yourself a favor.
By J.J. @ 02/04/10 08:28:20 PMreport abuse
Credit Card Debt and Society
Clark,

I some time ago stopped using credit cards except for on-line purchases which I pay in full when the bill comes in. It was hard. I had to have a credit card cutting party to accomplish it, saving only one credit card in case I had to rent a car. I wish everybody could do that ASAP.

I believe in free markets, and that markets will, over time, produce the best in products and services for the population. However, we don’t have free markets, and, worse, the government is playing Mama to the citizens such that they don’t even consider that they could be taken advantage of…they think the government will take care of them.

As for the not free markets theme I mentioned, no doubt the government will step in and require increased principal payments in addition to interest when making minimum payments. However, as our government is always lagging behind the people, the principle is out the window while the principal is barely moving at all.

Of course, neither our government nor our financial industry is fully to blame. Americans society has three bad attitudes: 1) It’s OK to be (overly) in debt. 2) It’s all about me. 3) I want it now.

We will experience a great recovery just as soon as the currently unwinding depression changes these social attitudes.

_aleph_
By _aleph_ @ 02/04/10 02:07:54 PMreport abuse
It's a long time over due.....
In 1979, I had a Bruner's Fine Furnishing credit card. I stumbled across a finance book or magazine, and it had 2 things I will never forget.

1. This book talked about a secret coding system that banks used on people. (We now call it a credit rating or F.Y.C.O. Score). The book said, that people had a number from 1-7. 0 meant no credit, 1-low 7-high. (These numbers are now 300 to 900). For years I squawked about a secret number system, and no one seemed to believe me….and then came Clark Howard!

2. This book had a calculations formula to take the balance you owe on your credit card, and times it by the %, it would give you the years to pay it off. To this day, I still remember those numbers; $300.00 loan, x’ 12% interest, minimum payment of $18.00s, came to payoff in 57 years!

I paid said credit card off, and didn’t have credit again until 1996.
By PennyPincher @ 02/04/10 02:06:52 PMreport abuse

I can't wait to see how small they make that wording. I'd also like to know how many people will actually read it.

By TheJackal @ 02/05/10 08:05:49 AMreport abuse

Make it work for you

Discipline is all it takes to use a credit card wisely. Having a credit card does NOT mean you have the money to buy everything you want. It gives you the means to put yourself into serious debt.

Card card issuers make their money off of morons - don't be one of them. If you cannot pay your monthly bill in full every month - cut up your card and do yourself a favor.

By J.J. @ 02/04/10 08:28:20 PMreport abuse

Credit Card Debt and Society

Clark,

I some time ago stopped using credit cards except for on-line purchases which I pay in full when the bill comes in. It was hard. I had to have a credit card cutting party to accomplish it, saving only one credit card in case I had to rent a car. I wish everybody could do that ASAP.

I believe in free markets, and that markets will, over time, produce the best in products and services for the population. However, we don’t have free markets, and, worse, the government is playing Mama to the citizens such that they don’t even consider that they could be taken advantage of…they think the government will take care of them.

As for the not free markets theme I mentioned, no doubt the government will step in and require increased principal payments in addition to interest when making minimum payments. However, as our government is always lagging behind the people, the principle is out the window while the principal is barely moving at all.

Of course, neither our government nor our financial industry is fully to blame. Americans society has three bad attitudes: 1) It’s OK to be (overly) in debt. 2) It’s all about me. 3) I want it now.

We will experience a great recovery just as soon as the currently unwinding depression changes these social attitudes.

_aleph_

By _aleph_ @ 02/04/10 02:07:54 PMreport abuse

It's a long time over due.....

In 1979, I had a Bruner's Fine Furnishing credit card. I stumbled across a finance book or magazine, and it had 2 things I will never forget.

1. This book talked about a secret coding system that banks used on people. (We now call it a credit rating or F.Y.C.O. Score). The book said, that people had a number from 1-7. 0 meant no credit, 1-low 7-high. (These numbers are now 300 to 900). For years I squawked about a secret number system, and no one seemed to believe me….and then came Clark Howard!

2. This book had a calculations formula to take the balance you owe on your credit card, and times it by the %, it would give you the years to pay it off. To this day, I still remember those numbers; $300.00 loan, x’ 12% interest, minimum payment of $18.00s, came to payoff in 57 years!

I paid said credit card off, and didn’t have credit again until 1996.

By PennyPincher @ 02/04/10 02:06:52 PMreport abuse

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Feb 03, 2010 -- Credit card minimums leave you in debt for nearly 50 years

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