You and your credit card

Here's an interesting situation:

• You owe $3,500 on your credit card - this is the average Australian credit card balance
• You spend $1,000 on your card during the month
• You pay $1,052 off your card at the end of the month
• The interest rate is 18% (fairly normal)

• How much interest will you have paid over 5 years?

• How much will you still owe on your card in 5 years from now?

See the answers at the end of the blog.

The answers are:

• You will have paid $3,150 in interest

• And you will still owe $3,500 on your credit card in 5 years

Is it better to pay off your credit card or put the money into your mortgage? 

Please feel free to post a comment.............