Credit Card Debt vs Investing

True cost of credit card purchases

You found a great deal on a big purchase and can pay for it in small payments over time, what’s not to love right? Well, a lot actually. Let’s figure it out together.

Sale Price vs Paid with Interest Total

Interest Rates
Your biggest enemy is the interest you have to pay. It’s usually a lot more than people realize. Let’s look at what it takes to payoff a $20k purchase at a high interest rate of 27%

Credit Card Payment Breakdown Principal and Interest

Additional Purchases
The above is crazy, it’s literally financial slavery. It will take you almost 9 years and over $31K in interest to pay it off. Here is where the real devil is, you keep buying, you keep adding and that steals your future, both financial and personal.

Value of investing instead

Don’t worry, we will help you get this under control, however you will have to do some work as well :). Here is what happens if instead of spending you just invested $500 a month for 9 years.

Monthly contribution to Investment total earned
Earnings over time chart
https://www.investor.gov/financial-tools-calculators/calculators/compound-interest-calculator

So you have a choice, you can make your credit card company rich or you can get rich 😉 Instead of paying creditors, you could have created wealth equivalent to $96,449

 

Are you in debt? Here is what you can do now

Start making better purchasing decisions. We are not saying stop buying, we are saying consider your choices. Create a balance of what you need today and what you want to build and have in the future.

Step 1 – Lower your Dept

Lower the amount of interest you will pay to your creditors. Refinance your debt or get a 0% credit card to pay off your credit card faster.

Step 2 – Improve Shopping Habits

Start building better shopping habits and slow down your overspending. Understand your relationship with money and improve your money habits and behavior. Our free Chrome extension Swipe Swipe is designed to do just that! Give it a try.

Step 3 – Save & Grow Your Money

Start saving and investing to grow your money. You need to start building these habits from day one. Learn how to invest.

Further Reading

Need help controlling mindless spending?

Download our FREE Chrome extension to help prevent impulse purchases when you shop online