In Debt to Debt

Debt Calculator

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Note*:Put the average interest rate that you are paying or that you were paying on your accounts. This will be used to calculate how much you would end up paying when staying current on your accounts. The interest rate that you put in here, will not effect the figures that are calculated for the consumer credit counseling and debt settlement programs.

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It’s crazy to think about how much we accumulate debt in such a minimal amount comparing ten years ago to now. Just over a decade ago, my records indicate I barely had $4k in credit card debt. Now with all the suggestive selling by Credit Sesame and various card companies advising to open another card to expand credit and lessen the debt, that vary advise leads one to be more in debt to the previous debt.

Sounds a bit inflated, right? A decade later, the debt has tripled.

In reviewing the interest rates on each card, they vary between 9% and up to 21%. Yet, the card with the highest rate had the lowest limit. Let’s say it’s an ACME credit card with a $500 limit and rate of 21%. Calculating the minimum amount to pay of $25 over a year would lead the card to be paid off in over 2 years with nearly $120 paid in interest. That’s 20% of the credit limit. (Not cool!)

This calculation caused me to go through each of my cards to clarify each and learn how long it would take to pay all of them completely. Needless to say, it would be close to the amount of years it took to accrue the debts and of course between double and triple the amounts owed.

You can check out what you will owe with the calculator.

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I made a plan to knock out this debt as quick as possible and without accruing any more. A detailed budget was created and a method to adhere to it. This included cutting my expenses and shopping cheaper for items that didn’t matter. Such as, some staple items I would purchase first at the local dollar store; tissue, paper plate, solo cups, shampoo, soap, mouthwash, band-aids, aspirin, toothpaste, etc. Doing this saved I saved over $175 the first month. I applied that extra savings towards a bill-even though I was tempted to go out to eat.

While most of this occurred while I had gotten my Associates and Bachelors degrees, I also hustled a lot! I had 5 jobs while raising my two children. So I did not have a lot of free-time. But I took the time to learn to sell things around the house on online marketplaces and brought in some extra cash. Before I knew it, I was able to make a good dent in the debt. I hid my cards in my safe. It felt good to finally give myself some well-earned debt relief.