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If you tend to carry a credit card balance from month to month, that could be stressful considering average interest rates on cards carrying a balance are at 22.75, according to the Federal Reserve.
For example, if you transfer $6,000 in credit card debt to a card offering 0% intro APR for 18 months, you could pay off the full amount by making $333 monthly payments with no added interest charges.
For example, if you have $40,000 credit limit across all of your cards and carry a $4,000 balance to the next month, your credit utilization ratio is 10 percent.
Few States Have Average Monthly Debt Payments Under $1,000. Meanwhile, the average total monthly payment per month is under $1,000 a month in only a handful of midwestern states and Mississippi.
Nor, of course, do all credit card users face those 20%-plus interest rates, as about half of borrowers pay off their credit balances each month and long-standing accounts feature lower rates.
In general, credit cards available to middle-class cardholders that range in credit limit from $1,000 to $30,000 calculate the finance charge by methods that are exactly equal to compound interest compounded daily, although the interest is not posted to the account until the end of the billing cycle. A high U.S. APR of 29.99% carries an ...
“If you only make minimum payments at 18.38% toward $5,270 — the average credit card balance, according to TransUnion — you’ll be in debt for 195 months and will owe $6,687 in interest.
With average credit card interest rates at 20.55 percent as of October 2024, those cardholders are likely paying quite a bit in interest each month — especially if their card is issued by a ...
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