How long would it take to repay a $2,000 credit card debt at a 19% interest rate by making

How long would it take to repay a $2,000 credit card debt at a 19% interest rate by making ONLY the minimum required payment of $25/month?

A. 9 months

B. 2 years

C. 6 years, 9 months

D. 15 years.

E. 22 years.

Answer: E. 22 years.

One of the ways is to pay the card off when the interest rate is a fairly high one given that the minimum required payment usually takes too long a time. In the same situation, if the individual would have $2,000 debt which would be 10% interest rate and the minimum monthly payment would be $25, then it would takes around 22 years to be fully paid the debt.

The obvious reason for this long payback period is that the amount which covers the interest is the larger one, thus leaving only a small percentage for the principal balance reduction. Over a period of time, the accumulating interest that takes the front seat completely; hence the final payments tend to be very costly and extended. This situation emphasizes the very fact of paying a higher amount than the minimum so as to cut down on interest costs and in turn make it easy to repay all the debts.