I’m anticipating our first blast of snow for the season. Can you guess the relationship between snowflakes and credit card debt? Think about the first few flakes that fall. They are inconsequential. Soft fluffy crystals ranging from .2 to 5 mm in width. It is safe to say that no person has ever suffered a fall, been smothered by or harmed by a single snowflake. As the snow continues to fall, the situation begins to change. The flakes merge with one another – and snow begins to accumulate causing havoc with roads, health risks from those seeking to shovel it and in areas where below freezing temps go for long durations – accumulation continues to grow.
Now let’s consider the first use of a credit card. We charge a couple of small items and the bill is $65.00. The minimum payment is $10.00, and the interest charge (even at 19%) for the first month is $1.03 if you don’t pay off the card. That’s the snowflake. What harm can come from $1.03 of interest? As time goes on, you have continued to make your minimum payments and the balance on the card is $13,500, leaving you $500 of available credit. The minimum payment is now $337.50, and the interest for the month is $213.75. Annually, you are now making minimum payments of $4,050 and paying $2,565 for interest. At this stage, you have reached heavy snow and you’re in for a long winter. As soon as you have 2 to say 5 of these cards (or more) with a total of $27,000 – $67,500 of balances due, with minimum payments of $674 to $1,687 per month (that’s $8,088 to $20,244 annually) and interest costs of $427.50 to $1,068 per month (that’s $5,130 to $12,816 annually) – you are buried in an avalanche of financial disaster!
As you watch the snow fall this week – think about those crystals representing accumulated interest that you will pay for endless years – at the expense of your retirement and your future. Moving to a warm climate can solve your dismay over accumulated snow, but you need concrete and sound advice to solve the credit card debt problem – and once you do it – it is money in the (your) bank!
If you want to jump start this process – Call us today for a free consultation – as the new year approaches, a fresh start is desired all. Go Lions and for those of you who are skiers – enjoy the snowflakes!
Did you know that THAV GROSS offers free consultations for business, financial, and tax problems? Call us anytime – (248) 645 – 1700 or CLICK HERE to send us a message.