If I could show you 6 ways your credit is costing you a fabulous European Vacation or a down payment on your first home, would I have your attention?
1) Your Credit Cards could be costing you $1,200 extra per year. According to creditcard.com the average rate with good credit is 10% while the average rate with bad credit is 22%. Lets use $10,000 in credit card debt as an example:
- Example 1-Minimum payment at 10% is $183.33 with $83.33 applied towards interest and $100 applied towards principal
- Example 2- Minimum payment at 22% is $283.33 with $183.33 applied towards interest and $100 applied to principal The difference is $100 per month per $10,000!
2) Your automobile payments could be costing you $1,400 extra per year. We used the calculator on cars.com with some average used car interest rates. Lets say you bought a $15,000 used car with a 36 month term:
- Example 1- Your payment at 3.44% would be $439.13
- Example 2 - Your payment at 20% would be $557.45 The savings is $118.12 per month, which equates to $1,419.84 per year.
3) Your auto insurance could be costing you an additional $450 per year. Did you know that credit scores over 725 typically receive a 25% discount on insurance premiums?
- Example- If on average you pay $150 per month for 2 vehicles this equates to $1,800 per year. A discount of 25% saves you $450 per year!
4) Your Utility and Cell Phone Company can charge you a deposit of $100 - $500 if your credit is less than stellar. This is a non-refundable fee.
5) Your Rental property could cost you $769 because your landlord holds the right to ask for an additional security deposit up front if they decide your credit is not good enough. The nationwide median price for a one bedroom apartment is $769 per month. This is $769 of your money they are holding and accruing interest on.
6) That dream job you didn't get because your credit was "poor" could end up costing you $10,000 per year. This equates to $833 per month! After three great interviews, you get a call that you were "great" but your credit was not so great and they've given the position to someone else. Your less than perfect credit can be costing you a grand total of $14,319 extra per year!