Why high interest eats up your monthly credit card payments
Understanding how APR works and how interest is applied to your debts is essential. Yet less than half of consumers “completely” understand credit card terms, according to a study released last year by J.D. Power. Of the 53 percent who were unclear about their terms, three out of four said they lacked clarity regarding their interest rates.
When it comes to your credit cards, interest determines how much money you’ll pay out to a creditor over the life of your debt. It also controls how much of every monthly payment you make gets eaten away by accrued interest charges. If your interest rates are too high, you end up feeding the creditor a constant stream of profit without really making a dent in the actual debt owed.
The infographic below can help you understand how interest works on your credit cards. It even gives you some tips at the end to help you take control of your interest rates so you can finally get ahead of your debts. If you still have questions, give us a call.