Credit and You – You are in “Charge!”

Suppose you have a credit card at a local department store with a balance of $3,000 and the interest rate is 29.9%, which isn't unusual for a store card. If you pay back $100 a month and don’t charge anything else on this card, how long will it take you to pay off the balance? How much interest will you end up paying once you have finished paying off your debt? When will more of your $100 payment be going toward paying down your principal (the amount of your debt) instead of to the interest on the loan?

To find out, go to the TimeValue Software's credit debt calculator.

Were you surprised by how long it would take to pay off the balance and how much interest you'd pay over the life of the loan? Small debts can end up costing you lots of money if you don't watch out.