Back On Track To Financial Freedom

  Credit cards can vary in interest rates. These rates can range from anywhere around 3% to 21% or more depending the company you are dealing with. This means if you have a credit card with an interest rate of 21% and you owe $1,000 on that card, you will pay roughly $210 a year in interest alone. The monthly payment will typically by around $20 per $1,000 a month which means that after 12 months, you will have paid $240 to the lender but you have accrued $210. in interest for that year. This means, that out of the $240 you have paid to the credit company, only $30 will actually be put toward the amount owed. At this rate, your $1,000 purchase will be paid off in around 25-30 years. That television that was on sale for $1,000 will cost you roughly $7,200. This may seem hard to believe but see for yourself. Look at your monthly statement and check out how much your amount owed went down from payment to payment. Then multiply how many payments you have left. I can promise you that you’re going to be disgusted.  I once had a consolidated loan, when I was younger and didn’t know better, that had an interest rate of 25%. The amount borrowed was $5,000 and the payment was $100 a month. After a year I noticed that my payment hadn’t been reduced like the lending association had said it would. When I called the lender, he told me that I had paid off about $50 of the total amount loaned to me. When I asked him what happened to the other $1,150. I had paid them he told me that it all went to the interest on the loan. This meant that at this rate, my $5,000 loan would cost me between $50,000 to $55,000 and would take me 40 years to pay off. I thought he was joking when he gave me these figures but he assured me that this was no joke. I felt like I was doing business with a loan shark but this was all legal and there was no easy way out. However, I did get out of a loan like this and will explain how you can too. Pay close attention.