welcome to DebtWave Credit Counseling Smart With Your Money Video Tips credit card debt calculators the importance of a low APR most important to the owner of a credit card or any loan for that matter is the interest-rate on that card known as an annual percentage rate or APR it is the percentage of money that you're going to pay back based on the balance of cars carrying on any given day week and month even though it's known as an annual percentage rate interest is actually accruing on a daily basis and we pay for it monthly let's take a look at how a lower APR can have drastic differences on how much we pay monthly the time it takes to pay off and the total cost of paying back the balance using a credit card debt calculator we will use the credit card numbers from our previous credit card calculator videos in the series let's say I have a twenty thousand dollar balance with a twenty percent interest rate and a four hundred and fifty dollar minimum payment once the calculations are complete you'll notice a few things if we were to pay fixed payments on this current debt without ever using the card again it would take me around seven years and a total of thirty six thousand seven hundred and fifty dollars to pay off the balance.

WOW second notice the breakdown of the monthly payments the first month's payment of four hundred and fifty dollars is broken down by the finance charge and the principal paid at twenty percent three hundred and thirty three goes towards the finance charge and only one sixteen goes towards the principle or towards the balance now imagine if we had a lower interest rates let's say i get an eight percent interest rate and commit to paying the same four hundred and fifty dollar payment look what lower interest rate to us much more the payment actually goes towards the principle it pays down the debt much faster and saves thousands of dollars just in this case i would save twelve thousand nine hundred and fifty dollars compared to that twenty-percent interest rates savings that would have previously always shop for the best interest rates you can come up with the plan when paying down the debt it will save you thousands in the long run if a minimum is all you can afford start their and commit to that payment for the the life of the balance even if the minimum payment required lowers each month to see how long and how much you pay each month and now that could be changed on this example visit that waves that calculators on our webpage at that waves dot com i go to the calculator stab at the top of the home page just type in your numbers you can also follow and like this on the following social networking sites