Just how much interest are you paying? Handy site will open your eyes
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SEATTLE -- One way to fight back against interest rate increases is to cancel your credit card and just use cash. But if that's too drastic for your budget, a special online calculator might help.
This calculator helps you really see how much extra money your bank is pocketing through high interest rates.
Simply enter your balance, the interest rate and the minimum monthly payment. In a matter of seconds, you see why making only minimum payments is like burning your money.
John Warring of Marysville tried it with his $4,500 balance. His interest rate is around 17%. Based on Bankrate.com's Credit Card Calculator, if John just makes the minimum payment of $108, it would take 263 months (nearly 22 years!) to be rid of his debt. In that time, he'd pay $5,894.93 in interest.
"I knew it was going to be a high figure, but I didn't realize it was gonna be quite as high as it was," said John, who generally tries to pay much more than the minimum the bank suggests.
When John changed the minimum payment on the calculator and doubled the amount to $216, the balance is paid off in a mere 25 months. Total interest paid? $870. In other words, he saved $5,000 in interest just by doubling his payment.
You can calculate your own savings atbankrate.com
This calculator helps you really see how much extra money your bank is pocketing through high interest rates.
Simply enter your balance, the interest rate and the minimum monthly payment. In a matter of seconds, you see why making only minimum payments is like burning your money.
John Warring of Marysville tried it with his $4,500 balance. His interest rate is around 17%. Based on Bankrate.com's Credit Card Calculator, if John just makes the minimum payment of $108, it would take 263 months (nearly 22 years!) to be rid of his debt. In that time, he'd pay $5,894.93 in interest.
"I knew it was going to be a high figure, but I didn't realize it was gonna be quite as high as it was," said John, who generally tries to pay much more than the minimum the bank suggests.
When John changed the minimum payment on the calculator and doubled the amount to $216, the balance is paid off in a mere 25 months. Total interest paid? $870. In other words, he saved $5,000 in interest just by doubling his payment.
You can calculate your own savings at
