Ever wonder why your debts take so long to pay off? You pay and pay, but the principle doesn't go down? Credit card debt is the most difficult debt to manage, mainly because of the way credit card companies calculate your minimum payments.

Your creditors, just as any other business, are focused on making a profit. The longer you have a balance with them and continue to pay interest, the more profit they make. Your required monthly payment is designed to be as low as possible to extend the life of your debt.

While it may feel helpful and less stressful to have low monthly payments, these payments can keep you in debt for decades. Typically, most of your payment is applied to the interest you are charged each month with very little of your payment being applied to your principal balance.

If you happen to use your card for purchases or cash advances, you could grow your balance forever (or until you hit your limit) even though you are making your minimum payments faithfully each month. Unless you learn how your credit card works, how interest is charged and how your payments are applied, you could be in debt for the rest of your life.

It is understandably easy to get caught up in the attraction of a low minimum payment. After all, a typical minimum payment is only 2% of your outstanding balance. If your credit card balance is $4,800, you may only have to pay $96 as a minimum payment. Beware! Even if you make no new purchases and you pay the minimum payment each month on time, it will take you 34 years to pay off your credit card! On top of repaying the $4,800 you spent, you will pay an additional $10,399.36 in interest.

The financial experts at Financial Educational Services, Inc. have developed an educational program and strategic debt reduction plan that you can use to break out of this cycle. Since everyone’s circumstances are different, each plan is custom designed to ensure you pay-off your debt and begin building personal wealth as quickly as possible.

If you would like to learn more about our program, complete the form on our Contact Us (link) page and we will be glad to contact you and answer all of your questions or give us a call at 1-800-282-1649.