Credit has never been easier to get.
We are bombarded with offers every day – with no interest on credit card credit transfers, household finance charges, big-screen TVs and devices, and low prices for the purchase of this new car.
It’s no coincidence that shortly after Christmas, your friendly bank will shower the media with interest-free credit transfer periods. This is crisis time for many people. The cards were maxed out for a good Christmas, and the debt-hangover is just starting to move in. The first post-Christmas payments are imminent and there is no cash to pay them.
The no-interest option for transferring the credit card balance seems to be a stroke of luck and is welcomed, but all it does is drive the stinking debts into the future. When it’s time to pay interest rates between 19 and 21%, there is still no cash, and the debt is kicked lower by getting more cards and shuffling the debt.
The Debt Shuffle
In the case of debt shuffle, cash advances are deducted from the remaining credits to make minimum payments on other cards and for other monthly payments. Here the fees and charges are charged. There are high fees to pay in advance and interest rates start immediately at 21% +, calculated daily.
Effective interest rates over 50% on cash advances
The fees and charges for cash advances will keep you from repaying if you may need to redraw and be re-charged. Cash advance fees mean that the effective interest rate on cash advances is very high. If you receive an advance of $ 10,000 on a credit card, the usual fees are 3% [$ 300] and the interest rate is 22%. If this advance were repaid after one month, the fees and interest paid would be $ 483. The effective interest rate is a massive 57.96%. The usury rates charged by the banks can not be hidden behind the smug self-glad smile of their overpaid CEOs.
91 years to repay
The real horror story of credit cards is that the minimum payment on the card means that it is unlikely that the debt will ever be repaid. If you are 50 years old, you can still pay for the trip to the United States you made at the age of 25 if you only make the minimum payment.
Actual figures: With a credit card debt of $ 37,809 and a minimum repayment, debt repayment would take 91 years and 3 months. The interest rates would be massive 181,292 USD.
What next? Just do it,
Many people in a debt crisis are paralyzed by analysis. You will read endlessly about what to do or simply switch off. There are solutions. You can be debt free, take back your life and do not have to go bankrupt.