Clara’s Debt Cycle: Making Minimum Payments on Credit Card Debt

Posted on 13 November 2018

How one mom stopped making minimum payments on credit card debt – and discovered freedom from debt.

No matter how you look at it, you won’t get out of debt if you can’t pay it off. When Clara, a busy working single mother of 3, began to realize that paying off her debt in full seemed almost impossible – she got help. Fortunately, there are solutions that can help when credit card debt gets out of control. Clara had been making the minimum payments on her credit cards for a while but she noticed her balance hadn’t changed very much. Clara began to understand that minimum payments are not designed to help you pay off your debt.

What are minimum payments?

Minimum payments are the lowest required payments on your credit card bills. If you can’t afford to pay your bill in full, you pay the minimum. The minimum balance amount is intended to keep your account(s) in “good standing”. If you make the minimum payments on your credit card bills by the due date, you will avoid late payment fees and retain your credit card privileges.

Minimum payments can help you when you’re short on cash. If you can’t clear your entire bill, it’s a really slow way to try and pay off debt. Your credit card balance won’t shrink very fast and may take years to pay off if you’re only making minimum payments. Your cost of borrowing also increases – as long as you have a balance to pay you will also be charged interest.

Even though Clara was making her minimum payments every month on time, with new interest charges, her debt wasn’t budging – she wasn’t paying enough “extra” to actually start paying off her balance.

Minimum payments will cost you more.

The calculation used to generate your monthly minimum payment is no secret. Neither is how long it will take to pay off your bill. Card statements have a disclaimer advising how long it takes to repay by making minimum payments alone. A more aggressive debt repayment plan was needed, but as a single mom, money was tight.

Clara needed to see what her options were. Clara compared her minimum payments over 5 years with other options including a consumer proposal. Her journey began with Spergel’s free online debt calculator.

Are you making minimum payments on credit card debt just like Clara was? Clara got out of the low payment debt cycle and got help with her debt. We can help you investigate a consumer proposal and compare full repayment to all other options. If you’re serious about becoming debt free, let us help. We’ll answer any questions you may have about dealing with credit card debt. Break the minimum payment debt cycle – let us help you discover how great debt free feels, call us today 1-877-501-4321 or click here to request a FREE consultation online.

Helpful starting information:

What to Bring to an Appointment

To get the debt help that you need, please bring a list of who you owe and how much to each, a list of everything you own and your monthly household budget. Don’t have everything right away? Don’t worry – We will guide you through each step.

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Your Information

We’ll walk you through our application process. But, if you want to prepare for your debt free assessment consultation in advance, download our information form and fill in what you can.

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Calculate Your Debt Repayment Options

How can you compare your debt repayment options if you don’t know how much they will cost you? Your solution will become much clearer when you are able to compare costs.

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Ready to Be Debt-Free?

If you’re ready to be debt free, it’s time to meet with one of our knowledgeable Licensed Insolvency Trustees at your convenience and get started

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