Having a substantial credit card balance can potentially lead to a person dealing with that particular credit card debt for a very long time. This can particularly be the case if a person’s financial situation is such that they can only make around the minimum payment each month.
This can be seen in a credit card debt calculation a recent MarketWatch article focused on. The calculation involved a hypothetical credit card situation in which a person has a credit card that’s annual interest rate is 18 percent and has a $2000 balance on the card. In the hypothetical, the minimum monthly payment for the credit card account is whichever is bigger between $10 and 2 percent of the current balance. If a person with such a credit card situation makes just the minimum payment every month, how long will it take for them to pay the balance off?
The answer may surprise you. The answer is a little over 30 years.
Having a particular credit card debt hang over one’s head for a long period of time can create some real problems for a consumer. It could make it more difficult for them to properly keep up with other debts they acquire over time. It also could make their financial options more limited if they end up in a financial crunch due to a job loss or other unexpected event. And if, over the time they have the credit card debt, they end up missing payments on the debt, it could end up having serious repercussions on their credit.
This is among the reasons why having high credit card debt could potentially have some significant implications on a person’s long-term financial health. When a person is struggling with high amounts of credit card debt, it can be vital for them to understand what sorts of problems and impacts they could be facing and what they could be able to do to help improve their situation. Thus, meeting with a bankruptcy/debt relief attorney to talk about one’s particular credit card debt situation and ask about potential options for debt relief can be wise when one is facing credit card.