Credit card offers are everywhere and credit card companies, while stricter these days, still sign up new customers every single day. If you are one of those credit card owners that companies love, you are likely in debt. Credit card companies prefer it when you carry a balance on your card because they can charge you interest on it. For too many people, not understanding how credit card companies make money is a huge mistake.

Applying for a Credit Card

Applying for a credit card is easy. You fill out an application that takes a few minutes to complete. The credit card company will do some background checks, particularly examining your credit scores and past payment history. If you have decent credit, you will qualify, and the company will issue you a card. The card comes in the mail, and you can begin using it immediately.

How It Works

You can purchase virtually anything with a credit card including gas, groceries, jewelry, even a down payment on a new car. When you use the card, you do not pay for the item or items until your credit card bill is due. Now, the beauty of using a credit card is that the company that issued the card only requires you to make a minimum payment. For example, your credit card bill includes multiple fuel purchases, a trip to the grocery store, and a new pair of jeans from your favorite clothier. The bill is for $750. The credit card company only requires a payment of $25.

If you choose to make only the minimum payment of $25, the credit card company will charge interest on the remaining $725. Percentage interest rates for credit cards are typically in the 20s and can be even higher. Let’s say your interest rate is 25 percent. If you never charge anything ever again on that card and pay just the minimum payment of $25 each month, it will take you a little over eight years to pay off your debt. When you finish, you will have paid more in interest than the original $750 bill.

How to Get Rid of Credit Card Debt

If you are one of the many who carries a balance on at least one credit card, you can see why it is in your best interest to rid yourself of that debt. One quick way to eliminate the debt is to use a car title loan. If you own a vehicle that is paid off, you can use it as collateral for a loan that can be used to pay off, or at least pay down, your debt. Embassy Loans is a leading consumer finance company that has helped thousands of customers through the years. Obtaining a car title loan is very easy, and applicants are not subject to credit checks. Borrowers can have their cash in as little as an hour, and most auto title loans are paid off within a year.