Used to just pay the minimum on my card until I saw the interest math

Back in fall 2022 I had about $3,200 on a Capital One card and just paid the $35 minimum every month. Felt fine because my balance wasn't going up. Then a buddy showed me the amortization table and I realized I'd be paying that off until 2029 or something. Switched to throwing $200 extra per month and it's almost gone now. Anyone else ever ignore how long minimum payments actually take?

3 comments

3 Comments

markh8524d ago

Totally agree, man. I had a similar wake-up call with a Best Buy card I opened for a laptop. Was just doing the minimums for like a year and a half, thinking I was being smart because the balance was slowly going down. Then I actually looked at the statement and saw I'd paid almost $400 in interest on a $1,200 balance. I was so pissed at myself. Started throwing $150 a month at it and had it cleared in about 10 months. Did you feel that same kind of frustration when you first saw the math?

milam4824d ago

I feel you @markh85, that frustration hits different when you realize how much you gave the bank for nothing. It's like you're paying them for the privilege of paying them slower. My thing was with a car loan, I did the minimums for two years and then traded it in, only to find out I'd basically only paid off the interest and the principal was still almost the same as when I started. I felt so dumb, like I'd been throwing money in a hole and not even making a dent. Now I check the interest totals before I even sign anything, it's like a mental slap in the face you need sometimes.

oliverhernandez24d ago

paying them for the privilege of paying them slower" - yeah that basically nails it. I read somewhere that most people don't realize how much of their minimum payment is just interest until they actually break it down. It's depressing when you see it in black and white. @milam48, that thing with your car loan is exactly what I've been trying to warn my younger cousins about. They're all excited to get a new car but have no clue how the math works on those long loans. It's like you need to see the total interest column highlighted in red before you sign anything, otherwise you're just guessing.