A few extra dollars can save you thousands on your credit card - WAOW - Newsline 9, Wausau News, Weather, Sports

A few extra dollars can save you thousands on credit card payments


WAUSAU (WAOW) -- Americans are buried under a mountain of debt.

Nationwide, according to the Federal Reserve, consumers owe almost $2.5 trillion. That includes debt from credit cards.

Almond resident Kristy Pleet got her first credit card as a student at UW Stevens Point.

"Once I had the card, they were easy to use," said Pleet.

So easy, she racked up quite a balance—$8,400, just from small purchases.

"Food, gas, Christmas presents, stuff we didn't need," said Pleet.

For years she paid the minimum payment. But her bill didn't shrink.

"I was really embarrassed, and I didn't want to tell anybody," said Pleet.

And her story is just one of many.

"It is a very widespread problem," said Shirley Hubert, a financial counselor at Catholic Charities in Wausau. She helps many people buried in debt.

"I'm thankful that they come in here and at least are asking for options to their problems, solutions to their problems, and then sitting down and just coming up with a plan," said Hubert.

Hubert starts with getting clients back on a budget so they're able to meet basic needs. Once there, she says, they can start attacking their debt.

Sometimes it takes baby steps to deal with debt. But those small steps can make a huge difference. Hubert showed Newsline 9 a bill for a Kohl's credit card. The balance was $1,957.61. The minimum payment was $58.00.

But a small text box just below the payment information showed just how financially devastating the minimum payment can be.

The statement showed if you paid the minimum payment, it would take 22 years to pay it off, and you'd end up paying $4,825.88. That's almost $3,000 in interest, more than the value of the purchases!

But if you paid $75 a month—just a little bit extra—it would only take three years. You'd end up paying $2,687.76.

Kristy Pleet finally decided to deal with her growing balance. She took out a loan from the credit union to pay off the credit card. Within four years, she says, it was gone.

"I kept a list on my computer of what bills I had or paid on what date," said Pleet. "When I got to take them all out of there, and my list of bills got so small, it felt really, really good just to not see them."

Now, she says her family pays for things with cash. They have just one credit card for medical emergencies.

"We're afraid that if we get another credit card, that we'll do it again because it's easy," said Pleet.

And she says she doesn't want to make that same mistake again.

For more information on rules credit card companies must follow, visit http://www.federalreserve.gov/consumerinfo/wyntk_creditcardrules.htm.

Online Reporter: Daniel Woodruff

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