A new, easy-to-use Federal Trade Commission Web site can help consumers calculate payments needed to eliminate credit card debt, a Kansas State University specialist said.
Suppose, for example, a consumer is carrying a $1,000 balance on a credit card with a 17.5 percent interest rate. If he or she makes a minimum monthly payment of $50, it will take five years (60 months) and $346 in interest to clear the balance, said Carol Young, K-State Research and Extension financial management specialist.
Increasing monthly payments to $75 will clear the debt in 15 months and offer a savings of $225 in interest; making monthly payments of $100 will retire the debt in 11 months and yield a savings of $257 in interest, Young said.
The Credit Card Repayment Calculator, which shows consumers how to calculate debt reduction by increasing payments or setting a timetable for retiring debt, is at the FTC-sponsored Web site: http://www.ftc.gov/creditcardcalculator.
