You might remember learning about compound interest - it works like magic! If you let your money compound over enough time, it’ll grow like crazy. Now, what happens when the compounding is turned against you? It’s still magic, but it’s not nearly as fun.
That’s kind of what happens with any kind of debt, but it’s way worse with credit cards due to higher interest rates. Credit card interest rates often range from 12% on the really low end, up to 25%, or even higher! To put that in perspective, if you have just a $1,000 balance carried over, your next month’s payment will include almost $21 just in interest - that’s more than a couple coffees.
Getting out of credit card debt is like swimming against the current - you might make some progress, but it’s going to be really slow going. That’s why the key is to never get into credit card debt in the first place. Don’t get me wrong, credit cards are great tools, and they’re a good fit for most people. They can help you build a strong credit score, lowering the cost of a future mortgage. They can help simplify your finances by decreasing the number of transactions in your bank account. They can even help you save money by giving you cash back on everyday purchases. But it’s important to use them responsibly by never charging more than you can pay off at the end of the month.
As always, keep in mind that you don't have to go it alone. Check out my website to see what it's like to work with me and reach out if you have any questions.
If you found this post helpful, help spread the word! But remember, this is solely for educational purposes - it's not advice.
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