The 6-Year Itch: Do Americans Truly Spend That Long Paying Off One Credit Card Buy?

Flywheel Publishing has partnered with CardRatings for our coverage of credit card products. Flywheel Publishing and CardRatings may receive a commission from card issuers.

A Reddit user shared a disturbing anecdote recently. The poster said that he works for a provider of store brand credit cards, and found out that the average time it takes for customers to pay off just one single purchase is six years. Since he said these store cards often have 29.99% APRs, he was horrified to discover that people were getting stuck in debt for so long — and paying interest at such a high rate for such a long period of time. 

So, the big question is, do people really take that long to get out of debt? If so, why is that the case, and can anything be done about it?

How long does it take to pay off credit card debt?

It’s hard to verify the stat the Reddit user provided because the amount of time it takes to pay off debt can vary so much based on many factors. For example, some people charge items and pay them back immediately when the bill comes, which means they are done with their debt right away with no interest paid. Others pay only the minimum on their cards, which means it can take years to pay off a single purchase — especially if the dollar amount of the purchase is high. 

Say, for example, that someone charged $200 on a credit card with a 29.99% APR. If they made a minimum payment equal to interest plus 1% of the balance, they would end up taking 17 months to repay their debt, and the total interest collected would be $46.34.  If someone charged $500 on a card, though, at the same APR and minimum payment rate, it would take them 67 months to be free of that debt, and they’d pay $510.92 in interest over that time. 

That’s close to six years — and the interest costs are more than double the initial amount spent.

How to avoid getting stuck in credit card debt for years

The harsh reality is, if you make minimum payments on your credit card, it is always going to take you a very long time to become free of the debt because too much of the money goes to interest rather than reducing your principal balance. 

There are two ways to avoid this.

One of the best options is to pay as much extra as you possibly can to your debt. If you add even a small amount to your monthly payment,  this entire extra amount goes to the principal so you can reduce the balance due much faster. Paying just $50 per month to the card with the $500 purchase instead of the minimum payment (which was around $12.50 to start and declined from there) would allow you to pay back what you borrowed in a year and pay only $82.67 in interest instead of $510.92. 

You can also try to refinance your high-interest credit card debt into a more affordable option — and ideally one with a set payoff schedule. If you could get a personal loan at a 10% interest rate and a 12-month payoff period, for example, that would save you a fortune.  You could potentially save even more using a balance transfer credit card that would allow you to transfer your balance for a small fee of 3% or 4% and pay a 0% rate. 

There are plenty of great credit cards out there with 0% APRs that you can use to finance purchases during the promotional period, or that you can use to transfer a balance to and reduce your rate down to 0% for a set time. Instead of getting stuck in credit card debt for years, explore these options first. 

Flywheel Publishing has partnered with CardRatings for our coverage of credit card products. Flywheel Publishing and CardRatings may receive a commission from card issuers.

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