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Why the Credit Card Minimum Payment Increase? You may be wondering why anyone would want to make you pay a higher minimum monthly payment products. colorado debt consolidation counseling The basic reason for making you pay more is: for your own good products. colorado debt consolidation counseling According to Mike Peterson, co-founder of American Credit Foundation, by doubling the amount you pay per month toward credit card debt, you will cut down on what you pay toward interest by much more products. colorado debt consolidation counseling Look: *Old monthly minimum payment of 2% of balance, $2,000 credit card debt at 18% percent interest: *Time to pay off debt in full: about 30 years. *Interest paid: about $5,000-two and a half times what you initially borrowed! *New monthly minimum payment of 4% of balance, same debt: *Time to pay off debt in full: about 10 years. Time saved vs. old payment: 20 years. *Interest paid: about $1,100-slightly more than half what you originally borrowed. Amount saved vs. old payment: $3,900. Tips for Paying Double Easily How do you pay off your new, higher credit card balance? Stop Charging Yes, you will have to make major sacrifices to stop using your credit card. But just look at all the money you'll have in ten or thirty years that you wouldn't have if you had to pay all that credit card interest. If you have trouble resisting the temptation to charge, here are some solutions that have actually worked: *Give your credit cards to a friend or family member to hold in safe keeping. *Freeze the cards in a block of ice. *Never carry more than one credit card with you. Economize on the Small Things According to Michael Peterson of the American Credit Foundation, even tiny savings really add up when it comes to debt. His favorite example is the Diet Coke example: *If you buy one Diet Coke a day at $1/day, that's $365/year. *If you instead invested that one dollar a day at 10% interest (the average yearly return on major stocks over the last half century), you would be a millionaire within 56 years. *Of course, with credit cards, this logic works in reverse: