The Real Cost of Paying Only the Minimum
A $5,000 credit card balance at 22% costs $8,680 in interest if you pay $100 a month. Raise it to $150 and the same balance costs $2,800 and clears seven years sooner. Here is the arithmetic.
Debt & credit
Debt is a maths problem wrapped in an emotional one. The maths part is straightforward: interest compounds against you, so the highest rate is usually the most expensive place to leave a balance. The emotional part is why so many mathematically perfect payoff plans get abandoned in month four.
The guides here take both seriously. They show the real cost of a minimum payment, compare the two payoff methods that actually work, explain how credit scores are calculated by the companies that calculate them, and set out what to do when the numbers no longer add up at all.
How Credit Scores Are Actually Calculated
Five factors, with published weightings, explain almost everything about a credit score. Most of the advice circulating about them is wrong, and some of it actively lowers your score.
Debt Snowball vs Debt Avalanche: The Maths and the Psychology
One method is mathematically optimal. The other is the one people finish. We ran the numbers on a realistic set of debts — the gap between them is smaller than the argument suggests.