Teach Your Child About Credit Card

One best way to learn about credit card is by someone else’s example to get an idea of how easy it is to accumulate credit card debt and how hard it can be to get out of debt making only minimum payments.

William uses credit card for petrol and on holiday. When he gets home, he finds out that the total of all of his charges comes to $3,500. If he is unable to pay off the entire balance in a single on-time payment, how long will it take William to pay off the entire balance if he only settle for 5% minimum payment of $175?

The financial institution will charge 15% interest and that will cost $525. With the original debt of $3,500. It will take William 23 months to pay off the entire debt.

With enough credit card and enough credit card debt, it is actually possible to become economically trapped where you will never get out of debt. Hence, avoid going into debt for anything you don’t actually need.

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