Debt Management Through Minimum Payments
Making minimum monthly payments is widely considered the least advantageous Debt Management solution for the consumer and the most favorable scenario for a credit card company. Any credit card holder who pays only his or her monthly minimum will see little downward movement in their monthly balance. Because monthly minimums are designed to maximize revenue for your credit card company, you’ll pay maximum amounts for the credit you use.
Here’s how continuing to pay your monthly minimum compares with DRO’s Debt Management program:
- Continuing to pay monthly minimums is beyond doubt the most expensive debt management option. By the time you retire your debt, you’ll have paid back many times the amount of the original debt.
- Because it can take over thirty years to complete this program, the idea of debt freedom is little more than an illusion.
- Costs for the DRO debt reduction plan amount to a small fraction of monthly minimum costs.
- Most clients achieve debt freedom in two to three years, or sometimes less.
When you choose to pay monthly minimums your outstanding balance can increase in some circumstances although you continue to make payments. This can happen if you pay late or have been charged over-the-limit fees. As a debt relief method, continuing to pay your monthly minimum is hardly a successful approach to eliminating debt.
Seen in this light, setting aside a fixed amount of money every month and using it to pay down your credit card balance is a more favorable debt help solution. Even though this method will help you pay down your credit card balance faster, it still takes almost three times longer than making the same monthly payment as part of DRO’s debt negotiation or Debt Management program.
Here are some other kinds of debt relief you should consider: Credit Card Debt, Consumer Credit Counseling and Debt Consolidation Program.
