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  • Writer's pictureKel Galavan

From Red to Black: The painful numbers of credit card debt and how to pay it off.

What are you doing for the next 22 years?

Heck, if I know, however, I do know what you'd be doing if you had €10,000 in credit card debt and only paid the minimum off each month.

I've even written out all the calculations for you.

Warning, the following few lines might give make your hair stand on end.

Don't say I didn't warn you….

The painful truth in numbers.

Life happens, and you find yourself with €10,000 on your credit card and no easy way to pay it off. So you decide to do what hundreds of thousands of others around the world do and pay the minimum balance each month.

'That's manageable', you think. 'I can do that', and 'I'll clear it eventually'. It can't be that bad.

Or can it?

If you paid off the minimum balance each month on a credit card with a balance of 10,000 at an APR ( annual percentage rate) of 20.81%, how long would it take, and how much interest would you pay? ( That interest rate is the average interest rate of the top n10 credit cards currently available in Ireland )

Assuming that the minimum monthly payment on the credit card is 2% of the outstanding balance, which is a common practice by credit card companies, the minimum amount required would be €200 (€10,000 x 0.02).

The interest rate of 20.81% is an annual percentage rate (APR), which means that interest is charged on a yearly basis. To calculate the monthly interest rate, we divide the APR by 12, which gives us 1.7342%.

If you only pay the minimum monthly payment of €200, the remaining balance on the credit card would be subject to interest charges each month. The interest charged on the first month would be €144.12 (€10,000 x 0.017342), which is added to the balance, making a new balance €9,944.12.

For the second month, the minimum payment would still be €200, but the interest charged would be lower because the balance is lower. The interest charged on the second month would be €142.88 (€9,944.12 x 0.017342), and the new balance would be €9,886.

This cycle would continue each month, with the minimum payment staying at €200 and the interest charges decreasing as the balance decreases.

Using this method, it would take approximately 265 months (or 22 years and one month) to pay off the credit card balance, and the total interest paid would be approximate €22,576.

Yes, you read that correctly:

22 years and one month to clear that €10,000 balance of purchases you probably don't even remember buying, will have cost you a princely sum of €32,576.


Your hard-earned money could be doing so many other useful things instead of going to service that debt.

So here is a step-by-step guide on how to crush your credit card debt once and for all.

Assess Your Debt

The first step to getting out of credit card debt is to assess your situation. This involves taking a close look at your credit card statements and identifying how much you owe on each card, as well as the interest rates and fees associated with each card. This information will help you create a plan to pay off your debt.

Know your income and expenses.

Once you have a clear understanding of your debt, the next step is to create a budget. This will help you prioritise your expenses and identify areas where you can cut back. Start by listing all of your monthly expenses, including rent or mortgage payments, utilities, groceries, and transport. Then, identify discretionary expenses that you can cut back on, such as dining out, entertainment, and shopping. This freed-up money will be used to put towards crushing your debt.

Develop a Repayment Plan

With a budget in place, you can now create a repayment plan. This works best if you have several forms of debt. If you only have one, then focus on throwing everything you have at it.

If you have more, there are several strategies you can use to pay off credit card debt, including the snowball method and the avalanche method.

The snowball method involves paying off your smallest debt first while making minimum payments on your other debts. Once you have paid off your smallest debt, you move on to the next smallest debt and so on. This method can be motivating because you see progress quickly. It's also a personal favourite of my mind. I am fond of quick wins.

The avalanche method involves paying off your debt with the highest interest rate first while making minimum payments on your other debts. This method can save you money on interest over time, but it may take longer to see progress.

Consider Consolidating Your Debt

This step should only be considered if you are juggling several debts, are feeling overwhelmed and feel that one payment per month would be more manageable. This method can also only work if you are ready to say goodbye to the debt cycle once and for all.

Consolidating your debt can make it easier to manage and save you money on interest. There are several ways to consolidate your debt, including transferring your balances to a low-interest credit card or taking out a personal loan.

If you choose to transfer your balances to a low-interest credit card, make sure you read the terms and conditions carefully. Many credit cards offer a low introductory rate, but the rate may increase significantly after the introductory period ends.

If you choose to take out a personal loan, make sure you understand the interest rate and any fees associated with the loan. Also, be aware that taking out a loan may require a hard credit inquiry, which can temporarily lower your credit score.

Seek Professional Help

If you are struggling to get out of credit card debt, consider seeking professional help. Money and Advice Bureau (MABs) can help you create a budget, develop a repayment plan, and negotiate with your creditors on your behalf.

Avoid Adding to Your Debt

Once you have a plan in place to pay off your credit card debt, it is important to avoid adding to your debt. This means avoiding unnecessary expenses and being mindful of your spending habits. It may also mean cutting up your credit cards or leaving them at home when you go out.

Celebrate Your Progress

Getting out of credit card debt can be a long and challenging process, but it is important to celebrate your progress along the way. I'm a huge fan of this as it helps keep motivation up and focus sharply on these goals.

Celebrate small victories, such as paying off a credit card or sticking to your budget for a month. Treat yourself to something.

Final Thoughts

Getting out of credit card debt may seem like an impossible task, but when you look at the number, it's impossible not to make it a priority.

With a little bit of planning, discipline, and determination, it is achievable. By assessing your debt, creating a budget, developing a repayment plan, and seeking professional help if necessary, you can break free from the cycle of debt and say goodbye to those monthly repayments.

Remember to celebrate your progress along the way and stay focused on your goals.

Future you will thank you for your efforts.

I share money-saving tips and money mindset tips weekly in my private email list. It's free to join, so make sure you are subscribed to the Smart Money Times Newsletter and get your hands on my new ebook From Out of Control to Cruise Control, 20 Simple Things to Completely Transform Your Money Life.

Disclaimer: This is information – not financial advice or recommendation. The content and materials featured or linked to on are for your information and education only and are not attended to address your particular personal requirements.


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