Minimum payments... what a rip off!

immoral_angeluk

Have just worked out our debt free date if we were to just carry on paying the minimum payments on everything and even though we only have £5666 worth of debt... it would take us until March 2014!!!!! :eek: I haven't even been brave enough to work out how much interest they would've got from us as well!!!!!
so glad we've had our lightbulb moment!!! I bet most people wouldn't even think twice about paying just the minimum, especially as you only have 2 choices of DD 90% of the time, full balance or minimum payment!!!
It's disgraceful!!!

pudding06

I agree - I worked out one for £5000 on MBNA min payment only and it wouldnt be paid off in my lifetime!!!!!!

not a great legacy to leave for your kids is it.

I just wish I'd known this years ago, been paying min payments for so long when I could have been snowballing.

pudds

gargoyle

I hate those adverts with "you can borrow 25,000 over a longer term and cut your monthly payments" - small print says that you pay back something ridiculous like 43,000!!!!

immoral_angeluk

gargoyle wrote:

I hate those adverts with "you can borrow 25,000 over a longer term and cut your monthly payments" - small print says that you pay back something ridiculous like 43,000!!!!

That wouldn't be the ' jooooooosh, yer daads fownd ya scootaaaah' one would it... :mad:

Storm

The main problem with some minimum payments is depending on the APR & the % you have to pay - you could just be paying off the interest each month and none of the capital!

I also find it very frustrating with the 2 DD options - I set up the minimum payment one on my CCs so I wouldn't miss a payment at all, and what it's actually done is meant I could ignore my CC statements when they came through!

CLAPTON

you could set up a standing order for any amount that suits you.

david_hellier

Cost of Borrowing £1000 on a credit card and
MONTHLY % APR% Total interest Time taken to get to £5 balance
1 12.68 £512 22 years 6 months
1.05 13.35 £551 23 years 2 months
1.1 14.03 £593 23 years 9 months
1.15 14.71 £637 24 years 5 months
1.2 15.39 £683 35 years 1 months
1.25 16.08 £732 25 years 10 months
1.3 16.77 £783 26 years 7 months
1.35 17.46 £838 27 years 5 months
1.4 18.16 £896 28 years 3 months
1.45 18.86 £958 29 years 2 months
1.5 19.56 £1024 30 years 2 months
1.55 20.27 £1095 31 years 2 months
1.6 20.98 £1171 32 years 4 months
1.65 21.70 £1252 33 years 6 months
1.7 22.42 £1340 34 years 10 months
1.75 23.14 £1434 36 years 2 months
1.8 23.87 £1537 37 years 9 months
1.85 24.60 £1648 39 years 4 months
1.9 25.34 £1770 41 years 2 months
1.95 26.08 £1903 43 years 2 months
2 26.82 £2049 45 years 4 months
2.05 27.57 £2211 47 years 8 months
2.1 28.32 £2391 50 years 4 months
2.15 29.08 £2592 53 years 4 months
2.2 29.84 £2818 56 years 8 months
2.25 30.60 £3074 60 years 5 months
2.3 31.37 £3367 64 years 9 months
2.35 32.15 £3705 69 years 9 months
2.4 32.92 £4099 75 years 7 months
2.45 33.70 £4565 82 years 6 months
2.5 34.49 £5124 90 years 9 months
2.55 35.28 £5807 100 years 11 months
2.6 36.07 £6661 113 years 6 months
2.65 36.87 £7759 129 years 9 months

Storm

OMG - those figures are truly scary! David, you must either be a mensa member with a natural affinity for maths or have wonderful spreadsheets (or both, or course!)

david_hellier

The power of computers I'm afraid. It assumes a 3% min payment and explains why the country is broke.

HairyHandofDartmoor

Well I and OH have been paying minimum payments on ccs for over 20 years. Says it all really!

Have our debts gone down? No. Until I discovered MSE they were getting higher and higher. The debts trend is now downward after reducing all our aprs and overpaying like mad.

Lesson learned. Never pay the minimum, always overpay.

Glittermonkey

After working out how many years only paying the minimum amount would take to pay off - i nearly died! I think one of my cards would take me about £8 years and its only got £1500 on it, didnt have the guts to then work out the ones i owe more to.

I do the banking at my work which involves peoples bills and it winds em up when i see people only paying the minimum, especially when they have a quite a small balance anyway. I know i dont know everyones circumstances and they may not be able to afford a penny more, but i really feel like asking them and explaining how many years they are going to pay it back.

My colleague did once mention the above to a regular lady and her answer was she never planned on paying it off, if she still had the debts until she died, so what?!

GM x