Buzz
Credit card minimum payments are structured to keep you in debt for an extended period. The higher your monthly payment, the faster you'll be debt-free. For a clearer picture, check out this chart from Business Insider. It shows how long it will take to pay off your debt based on your monthly payment amount.
The chart also factors in your interest rate. Typically, a higher interest rate means it will take longer to pay off your debt because a portion of your payment goes toward interest rather than the principal. Business Insider clarifies:
For example, if you owe $5,000 and decide to pay 3% — or $150 — of that debt every month with an annual interest rate of 14%, it will take 43 months (roughly years) to eliminate your debt. However, if you increase your monthly payment to 10%, you can clear it in less than a year.
It's fascinating to see how your debt repayment timeline can change based on your interest rate and the amount you're able to pay each month. For more details, visit their full article through the link below.
Photo Credit: Skye Gould/Business Insider
