Almost all Americans carry credit card debt. Actually, over 40% of US families spend more than they earn. If you're like most of us, you try not to think about how much money you owe and what that debt is really costing you. If you did, you might not sleep too well. However, by not fully understanding your current financial situation you are only prolonging the problem. In order to rid yourself of unsecured debt, you need to face the uncomfortable and often painful fact: it is very possible that your current debts may take you 30 years to pay off.

That can't be possible you say! I only owe $6,000. This should be paid off a couple of years. My credit card company would not do something so unethical to me, would they?

As a matter a fact, they would. In fact, if you took 30 years to repay your debts, you are an ideal credit card customer. It's important to realize that the credit card companies only allow you to make minimum payments because it benefits them. This is not a good thing for the credit card holder. They do not do this out of generosity; this is how they make money.

By paying only the minimum monthly payment each month, you are virtually guaranteeing that you will be a customer for life. If you are genuinely concerned about your financial wellbeing, you should be adamant about paying more than only the minimum balance on your credit cards each month. You must remain cognizant of the fact that if you can't afford to pay more than the minimum balance on your card each month, you can't afford whatever it is that you are buying.

When making a credit card payment, your funds are separated into two parts; interest and principal. Traditionally, when you only make minimum payments, most of it goes towards interest that is paid to the credit card company, which is why it takes so long to pay off your debts. Would you pay $10,000 for an item that is priced at $5,000? If you purchase that item on a credit card that is exactly what you're doing. If your credit card has an 23% interest rate and you only pay the minimum payment each month you will never get ahead!

Alan Barnes
IAPDA Certified Debt Arbitrator
President and CEO of Debt Regret
http://www.debtregret.com