Making Minimum Payments is Insane

Most of us have heard, “the definition of insanity is doing the same thing and expecting a different result,” but that’s only the beginning of the insanity involved with making minimum payments on credit card debt. If you want to get out of debt, you’ll be shocked and amazed at what your creditors have gotten you into

Why Making Minimum Payments is Insane

“I’m gonna make you a deal: I’m going to give you hundreds of dollars and you’re gonna pay me back thousands.” — Sincerely, Your Creditors

If you can’t write a check, and you don’t have the resources like a 401k or equity in a home to pay off your debt, what can you do?

Making minimum payments is only good for you in the very extreme short term to maintain cash flow, but as a long-term strategy it is simply insane, for a few good reasons your creditors hope you never realize…

Most people out there are just making minimum monthly payments, exactly what the banks want them to do.

The average client I deal with these days has around $40,000 in credit card debt.

This is a lot of debt, on top of which they’re paying 20% to 30% interest.

These large monthly payments really hurt your debt-to-income ratio.

This means, even if you are current on your payments, your “good credit” isn’t going to get you anything other than more credit card debt because lenders will not approve you for major purchases like homes and autos.

Most of these folks are also over half-way utilized. Many people are already maxed out, hurting their debt-to-credit-limit ratio and further damaging their credit, even if their payments are current.

What most don’t realize is even if they have perfect a payment history and a “good credit score”, but they’re over utilizing their available credit or have a high debt-to-income ratio, then they won’t be able to get affordable financing for the things they really want (cars, homes, etc).

Those minimum payments aren’t getting them any closer to these goals either.

Many people these days live their lives mistakenly struggling to achieve the “holy grail” of good credit by making their minimum payments on time. Unfortunately, that’s a trap! There are a lot of false beliefs that keep people in this cycle for a long time. You’re basically trapped if you don’t get off of that treadmill; you’ll be on it forever, making those minimum payments…

Minimum Payments on $40,000 of Credit Card Debt at 20% Interest will take you OVER 40 YEARS to Pay Off.

(If you never charge another dime)

That’s a long time! A little too-close to forever, isn’t it?

Even if you owed $20,000 with an 18% interest rate, you’re still looking at 30 years or more to get out of debt.

The appeal to buying on credit is overwhelming. You can have a lot of leverage because you can buy a whole bunch of stuff with a small monthly payment. This allure is what has trapped most people in America and is causing the current debt epidemic.

There’s over $2.5 trillion of consumer debt. It’s an epidemic! The credit card companies are raking it in with little to no regulation on how they conduct their business (i.e.: interest rate hikes, penalties, fees, etc). This is not a small problem, and this is the trap you’re falling into when making minimum payments.

There’s a Better Way Unless You Just Want to Be a Slave to Credit Card Debt for the Rest of Your Life.

Stop the insanity today and discover a better way to get out of debt fast!

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Jesse Niesen, Author, “Debt Free ASAP!” | DebtGoToGuy.com | 888-928-DEBT

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