Ever look at your credit card statement? I mean really look at it?
If so, you cannot fail to have noticed, often in fine print, the “estimated time to pay” statement. This is a requirement by the federal government, made a few years ago, that all credit card issuers must notify cardholders the length of time it will take to pay if they continue to only pay the monthly minimum payments, which many consumers do.
Here are some examples seen in our own practise (names omitted):
1. credit card balance $19,984, interest rate 10.75%; estimated time to pay = 156 years, 9 months
2. credit card balance $1,885, interest rate 24.95%; estimated time to pay = 94 years, 3 months
3. retail credit card balance $3,531, interest rate 25.99%; estimated time to pay = 26 years, 0 months
That is the impact of interest.
(The record we’ve seen here at our firm stands at 212 years, 7 months)