Americans are going to be in for a eye opening surprise to be shown on billing statements for credit card accounts. Did you know that the average credit card debtor only pays off only $2,000.00 every 3 years on their credit cards. If I would have said this to you 2 years ago, you probably would think that I am a nut! How can it be within the laws for banks to charge you over 20% interest and on top of that keep you in debt for such a long time. Well, now you are going to see that I was not lieing 3 years ago! Thanks to the new credit card reform, banks are going to have to show you how long it will take to pay off your debts. The scary aspect of this is that on some of these statements credit card companies will have to clearly print that YOU WILL NEVER PAY OFF THIS ACCOUNT PAYING ONLY THE MINIMUM PAYMENT. I can already feel your reaction! It’s probably something like “What! Are you kidding me, how, why, can they do that?”. The answer is yes they can and they will! I want to explain how, and why:

How:
The majority of credit card companies with the exception of few such as Discover credit cards, structure minimum payments as 1% of the balance plus interest charges. Some of these credit card companies will even charge less as a minimum payment! Just for this example I am going to use 1% plus interest charges so you can fully understand how this works! Lets say you have an outstanding balance of $25,000.00 on one of your credit cards. On this card you are paying 20% interest. Well 1% of this balance will be $250.00 which is all you will put toward the balance this month. Interest this month will be $416.67 meaning your overall payiment will be $666.67 for the month. Understanding that only $250.00 of that payment will actually go toward the balance is anoying enough but now hopefully you can see how they can keep you in debt for so long!

Why:
Well when you look at it from the credit card companies point of view this is actually a great thing for them. Over the life of your debt they are going to make more than what they gave to you in the first place. Even if you don’t ever pay the debt off, the bank still stands to turn a huge profit from your account! Now that you understand how and why they do this, I would like for you to go to www.JemCreditCards.com and learn how to get around it and actually get the chance to pay your debts off!

For more information on this topic or to discuss any other topic, feel free to contact us:

By phone : (561) 355-0069
By email : Support@JemCreditCards.com
On the web : www.JemCreditCards.com