University of Illinois Extension

Get Credit Card Debt Under Control

Lois Smith, Consumer and Family Economics Educator

If you spent more on holiday gifts than you intended, you're not alone. Nearly one-third of adults say they spend more than they should during the holidays. One survey showed most spent $100 to $500 more than they planned. And, for some, this means a hefty credit card debt for the New Year.

If you used your credit card a little too freely, strive to pay the balance as quickly as possible. After the holidays, some credit card companies offer to let you skip a payment or two. Or, the company may even reduce your minimum payment. Don't be tempted to take these offers because you'll pay more in the long run through interest costs.

Paying just the minimum amount on the card balance each month is dangerous to your financial health, too. You might be surprised how long it will take you to pay off your bill. For example, if you have a credit card balance of $1,825 at 18 percent interest and pay only a minimum monthly payment of $28, it will take you 21 years to pay off the balance and cost you over $5,000 in interest. And, that's with no additional charges on the card over those 21 years!

To see how much the interest cost affects your debt, use Extension's on-line credit card calculators at: http://web.extension.illinois.edu/creditcardsmarts/.

This website also allows you to figure out how much you need to pay each month in order to pay off your balance in a certain amount of time.

If you don't have Internet access, contact your local U of I Extension office for information about managing credit card debt.