Credit cards increase the cost of what you buy
4:43 p.m. Thursday, December 27, 2007
Americans are burying themselves in debt, and more and more of us are falling behind on payments.
But even if you do make all your payments on time, you're still spending a pretty penny if you're using credit and not paying in full at the end of the month.
So, how much will that Christmas shopping actually end up costing you if you paid with plastic?
Let's say you spent $500 dollars on credit. If you have a 13 percent interest, that's the average, and you only make the minimum payment per month, it will take you 4 years and 5 months to pay down that Christmas debt. And that $500 in holiday cheer will end up costing you $636.
It's not easy to pay those bills in full. One option is to call your credit card company and ask them to lower your interest rate. If they don't, threaten to transfer your balance to another company. Often, they will say yes. You'll get a better interest rate and save money.
The credit crunch has investors nervous.
Besides concerns over credit cards and mortgages, they worry some Americans may not be able to pay off other debts, like car loans and even student loans.
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