Opening a credit card statement these days often comes with a bit of sticker shock. Banking regulations passed in recent years now require lenders to show consumers how much their credit card balances will generate in interest and fees if only minimum payments are made to pay it off. For example, a healthy monthly payment of $50 going toward a modest $2,500 balance at 9 percent interest will take over 5 years to pay off and add $645 in interest—a whopping 26 percent of the borrowed amount.
Credit card interest rates are now hovering around 29 percent for many U.S. borrowers, who, on average, hold just over $10,000 in credit card debt per household. By any economics definition, one would think that consumers would be rushing to pay double or triple the minimum payment to avoid a mountain of interest and decades of (Read More....)
