SOURCE: Credit.com

Credit.com

October 21, 2014 09:00 ET

75% of Americans Have Debt -- Credit.com Reveals How Much It's Really Costing

Launches Tool Showing How Much Money Americans Lose to Interest Over Their Lifetime; For Many, the Cost of Debt Is More Than the Cost of Raising a Child

SAN FRANCISCO, CA--(Marketwired - October 21, 2014) - Credit.com, the leader in credit advice and online educational tools, today rolled out a next generation financial calculator called "The Lifetime Cost of Debt" that shows Americans how much money they'll lose in interest payments to banks, mortgage and auto lenders over their lifetimes. Shockingly, for many, the cost of debt is more than the average cost of raising a child to age 181.

The first-of-its-kind tool is 100 percent personalized and marks the evolution of the financial calculator. Whereas the typical calculator is little more than a spreadsheet with buttons, Credit.com's new tool guides you through a simple and easy-to-understand experience. It not only gives you your personal financial information, it also shows you where you stand compared to others. First, consumers enter key details about themselves. Then, after they enter their mortgage, auto loans and credit cards balances, they will see what their estimated amount of interest payments -- the cost of borrowing money from financial institutions -- will be over their lifetimes. Finally, the tool shows them how that amount could change for better or worse based on their financial behavior.

While debt is often essential, such as with a mortgage or an auto loan, the average consumer doesn't realize that interest rates are based on the strength or weakness of a credit score. Even an average credit score can ultimately cost a consumer more than $279,0002 over the course of his or her life in interest payments. The Lifetime Cost of Debt tool brings this point home by revealing how the true cost of debt fluctuates based on their credit score. 

"It's easy to underestimate how much a credit score can cost -- or save -- you over a lifetime of borrowing. Most people understand that it affects their ability to get a car loan or rent an apartment, but they underestimate how much their credit affects how much they pay in interest," said Gerri Detweiler, Director of Consumer Education at Credit.com. "With the Lifetime Cost of Debt calculator, consumers will finally understand why their score really does matter, and how a good score can save hundreds of thousands of dollars in the long run."

This is only the first of Credit.com's line of next generation financial calculators. It's also launching:

Credit.com's interactive tools are making their debut at an opportune time for consumers, helping the 75 percent of Americans that have debt3.

For more information, and to see the impact of your credit score on your debt, please visit http://www.credit.com/tools/lifetime-cost-of-debt/.

Sources

  1. Parents Projected to Spend $245,340 to Raise a Child Born in 2013, According to USDA Report
  2. Credit.com Lifetime Cost of Debt Average Methodology
  3. Changes in U.S. Family Finances from 2010 to 2013: Evidence From the Survey of Consumer Finances

About Credit.com
Credit.com is a company comprised of personal finance experts and Silicon Valley technologists who share a singular mission: educate and empower people to take control of their credit. With insightful advice and personalized tools, Credit.com helps consumers understand that an excellent credit score is more than a number. It is the path to a secure financial future and better quality of life. Only Credit.com provides consumers with a customized view of their credit standing and an actionable plan to improve it -- all for free.

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