John S Kiernan, Managing Editor
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The average monthly credit card bill is a minimum payment of $132.36, based on the average American credit card balance of $6,618 and the average minimum payment percentage of 2%. It would take over 7 years of minimum payments for the average person to pay off their total credit card bill – assuming there are no new purchases – and it would cost roughly $3,610 in interest. That assumes the average APR on all existing credit card accounts: 22.83%.
Each person’s monthly credit card bill is determined by a number of factors, such as the interest rate, average daily balance, and billing cycle. Not every credit card issuer calculates interest the same way. However, every credit card issuer is required to state how they calculate interest in the credit card’s terms.
Stats About the Average Monthly Credit Card Bill
- Average Minimum Payment Due: $132.36
- Average Individual Credit Card Balance: $6,618
- Average Household Credit Card Debt: $10,951
- Average Annual Percentage Rate: 22.83% (V)
It’s a good idea to pay your monthly credit card bill in full whenever possible, because interest accrues when balances are carried from month to month. Many people get into the habit of paying their minimum payment and don’t realize how much of the payment goes toward interest.
It’s also important to note that, by law, payments above the minimum for general consumer credit cards must be applied to the principal balance, not to interest.
Figuring Out Your Credit Card Payoff Plan
You can look at your monthly statement to see how long it will take to pay off the balance if you only make the minimum payment. You can also see how much you need to pay each month to pay off the balance in three years, for instance.
Plus, plugging your own debt values into a credit card payoff calculator will tell you how long it would take to pay off the full balance with different payment amounts. The tool will also show you how much interest you’ll pay overall and how much you could save by making larger payments. If you can pay more than the minimum on your credit card debt, you’ll save a lot of money.
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