Calculating Credit Card Debt

Calculating Credit Card Debt

*Update Since publishing, some of the links to other articles have been updated to a newer version.


I have a confession to make. When I was in my 20s, I carried a healthy amount of credit card debt. Constantly. For years. Looking back, it wasn’t the smartest thing to do. But at the time, I wasn’t making a lot of money. And carrying credit card debt allowed me to go out for Happy Hour drinks, have cable TV, go on the occasional road trip, etc. I just didn’t think about it, it was another expense.

And I know I wasn’t alone. Taking on debt is as American as Apple Pie. Check out NerdWallet’s 2016 American Household Credit Card Debt Study*. It tells us that US consumers are carrying about $874 Billion in credit card debt. That’s over $16,000 per household.

So why did I break the habit? I finally realized how much it was actually costing me! I only thought of my minimum payment as an expense. If I had a revolving balance of $16,000 with a 17% APR and just paid the minimum every month, I’d be paying over $200 a month and over $2,400 a year just in interest!

 Once I figured that out, I did whatever it took to get myself to a zero balance. It turns out racking up credit card debt to do the things I wanted to do was making it harder and more expensive for me to keep doing them.

If you’re someone who is carrying credit card debt like I was, do the math for yourself. There are plenty of free calculators out there to help: have a few here and have some here.

Good financial planning is about your financial goals, and can include practices like creating an emergency fund, retirement planning, funding a child’s education, or saving for your first home. If these sound like goals you have or may have for yourself, getting rid of debt can be an important step in the process, particularly on high-interest rate credit cards.






Anna Sergunina
Anna Sergunina

I'm Anna Sergunina, CFP®, President & CEO at MainStreet Financial Planning, Inc. My passion lies in serving others through financial planning, helping clients achieve their dreams like buying a home, saving for education, or retiring early. With over two decades in the industry and a CFP designation since 2009, I'm dedicated to excellence and continuous growth. Beyond work, I cherish moments with my son Liam, prioritize self-care, and engage in content creation for my Money Boss Parent Podcast and Money Library blog.

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