Minimum Payments. What is it costing you?

Let's face it. The interest you pay on your credit card debt is like throwing money away. This is a blanket statement but what is credit card debt really costing you?

If you are making the minimum payment on your credit card each month their's a free tool that shows you just how much this is costing you. Check-out this credit card calculator over at bankrate.com.

Here's an example: If you carry a balance on your credit card of $5,000 @ 12% interest and make the minimum payment each month of 2.5% $125. It will take you 219 months (just over 18 years) and cost you $3,180 in interest to pay off the $5,000. Ouch!

If you could bump up your payments to $200 per month, you would pay this same $5,000 off in 29 months (2 1/2 years) and pay only $782 in interest.

Two points in all of this. One, Stop using credit cards. Two do whatever you can to be able to pay more than the minimum monthly payment each month.