You are Here > Home > Credit > How long will it take you to pay off your credit card?

How long will it take you to pay off your credit card?

Dec 24, 2013

If you only pay the minimum due on your credit card you will remain indebted for decades.

How long will it take you to pay off your credit card?The Australian government’s website MoneySmart.gov.au has a very handy calculator that shows you how long it will take you to pay off your credit card based on what percentage of the total debt you pay each month.

The really scary figure is how long it would take you to pay off your credit card if you just paid the monthly minimum required.

In South Africa the average interest rate on a credit card ranges from 20% to 25% and the minimum repayment required each month is between 3% and 5% of the capital.

If you owed R20 000 on your credit card, had an interest rate of 20% and only paid the minimum amount each month of 3%, it would take you nearly 25 years to pay off your credit card over which time you would have paid the bank R43 600.

The higher the interest rate the worse that figure becomes. If you have an interest rate of 25% it will take you nearly 34 years to pay off the card and you would pay R61 600 to the bank.

If you wanted to pay off your card in two years you would need to pay R1 046 per month. By the end of the two years you would have paid the bank R25 000 which is nearly R40 000 less.

Only paying the minimum amount on your credit card is just not a viable financial option.

0 Comments

Submit a Comment

Your email address will not be published. Required fields are marked *

Maya Fisher-French author of Money Questions Answered

Previous Articles

It’s time to spring clean your finances

“When you don’t know where your money is, when you have no filing system for your important documents, when you dive into your pocketbook to pull out crumpled bills, when your car looks like a garbage can, when your closets are filled with junk and clutter you cannot...

Self-service facility for GEPF members

Technology is making it easier for GEPF members and pensioners to keep track of their pension information and claims process. By downloading the new GEPF self-service mobile app onto your device, you can remove the frustration of standing in long queues at GEPF...

GEPF establishes complaints handling office

If you are struggling to get your claims processed or not receiving your benefits, help is at hand with the recent establishment of the Government Employees Pension Ombud (GEPO). The state is the largest employer in the country, and the Government Employees Pension...

More households supporting unemployed family

For many working South Africans, the pressure of financially supporting friends and family is unrelenting. Most of us have either experienced a job loss or have a family member who lost an income due to the extended Covid-19 lockdown. It is not surprising then that...

What is screen scraping and is it safe?

Screen scraping can be used by criminals to steal data, but financial services companies are increasingly making legitimate use of this too. Angelique Ruzicka investigates what the process entails and how consumers can protect themselves. Screen scraping can be hugely...

Are banks putting customers first?

Banks were in the spotlight recently with the release of the annual report by the Ombudsman for Banking Services (OBS) and feedback from the Financial Sector Conduct Authority (FSCA) regarding the banks’ adherence to the Conduct Standard. The draft Conduct Standard...

Should women celebrate community of property rights?

There has been much celebration around the protection of women in customary marriages with President Ramaphosa recently signing into law the amended Recognition of Customary Marriages Act. However, are these women fully aware of the implications, especially around...

Five tax myths many employees still believe

Tanya Tosen, Tax and Remuneration Specialist at Remuneration Consultants, addresses five tax myths that have become popular over the years. Many employees don't understand the complex tax calculations that payroll applies to their earnings each month and often...

Relief for struggling restaurants

Soft loans and payment holidays are available for restaurants still battling to survive the pandemic. At the beginning of May, my favourite local coffee shop closed its doors after 20 years of trading. My neighbourhood shopping centre, which caters to many “mom and...

Money and divorce

David Thomson, Senior Legal Adviser at Sanlam Trust, shares some practical tips about the financial side of divorce. The news of Bill and Melinda Gates filing for divorce after 27 years of marriage sent shockwaves through the philanthropic world. The couple is worth...

Pin It on Pinterest

Share This