I am 52. My CC debt is $25,000. I pay extra to one card and the minimum on the other. The extra is paid on the higher rate card.
2007-03-09 22:17:10 · 7 answers · asked by retireat65 1 in Business & Finance ➔ Personal Finance
Depending on what your interest rate and minimum payment percentage is, it is going to take you 20 to 40 years to pay off $25,000 making the minimum payments.
I'll assume that your interest rate is around 18% on the credit cards, which is pretty typical. Over the next almost 20 years, you are going to be paying somewhere around $23,000 in interest charges alone on those cards. If your minimum payment is only 2%, and some are, you will be paying almost $70,000 in interest on $25,000 of debt, and it will take 46 years to pay them off with minimum payments. The ONLY way to pay less interest is to reduce the amount you owe on them by paying them off as soon as possible.
A typical retirement account averages about an 8 - 12 % return. You are currently losing more in interest then you would make in returns on a retirement account.
You need to be paying as much as you can on the credit cards as fast as possible or you are still going to be trying to get out of debt at age 72. And stop charging stuff. Adding to the debt on those cards will only make it worse.
2007-03-09 22:54:41 · answer #1 · answered by Faye H 6 · 0⤊ 0⤋
It makes no sense to have a retirement account making around 5 to 10% when an average credit card will cost you sometimes in the 20% range.
Pay off the credit card NOW !!! then buckle down, don't spend except for spending on your retirement.
2007-03-10 01:25:30 · answer #2 · answered by Kitty 6 · 0⤊ 0⤋
Pay off your credit cards first the interest is higher .
Cut your credit cards up that is a huge amount of debt for credit cards.
Get in the habit of paying in cash only , this way if you don`t have the money you don`t buy it. And you will appreciate the value of money way more .
2007-03-09 22:22:40 · answer #3 · answered by Heads up! 5 · 0⤊ 0⤋
Pay off your credit cards. It the long run you'll be doing yourself a good favor. By paying the minimum amount it will take to 23 to 30 years to pay them off. If you pay more now you'll have more to put in your retirement after they are paid off. Try not to use the cards unless you're in a hospital life or death situation. Like heads up says cut them up.
Good luck.
2007-03-09 22:29:43 · answer #4 · answered by greylady 6 · 0⤊ 0⤋
You should pay the Credit Card Payment first, as the interest rate would be very high, it will be much higher than the interest rate on your investments.
2007-03-09 23:50:00 · answer #5 · answered by Sameer 2 · 0⤊ 0⤋
Get rid of those things eating your lunch
then build that 401k or IRA
2007-03-09 22:20:56 · answer #6 · answered by tom4bucs 7 · 0⤊ 0⤋
1 dues, then investment for a bigger corp.
2007-03-09 23:22:53 · answer #7 · answered by war l 1 · 0⤊ 0⤋