This is an info-comic graphic produced for Mint.com.


When using credit cards, it is can be very dangerous to pay the minimum payment displayed on your statement. The minimum payment typically represents a very small percentage of your full balance due, sometimes as low as 1.5%. You could end up paying enormous total interest charges over the course of several decades to pay a card off by only paying the minimum.


With the passage of the CARD Act in 2009, all credit card statements are now required to display how long it would take the account holder to pay off the balance paying only the minimum payment. Below is a sample of the new information on an actual Chase card statement. Notice that the minimum payment is a tiny 1.9% of the full balance due ($16 divided by $824.84). You can significantly reduce your interest charges by making a small increase in your monthly payments. As seen in the comic, making monthly payments of 3% instead of 2% reduces the total interest charges by $35,000!


Be warned! Only use credit cards when you know that you can pay the full balance when it is due. Credit cards should be used for convenience–not for spending money that you don’t have and likely still won’t have next month.

Fun Fact: You typically can’t get extended warranties on cars that have more than 75,000 miles or are more than 7 years old.

This article is a response to the following request submitted on Mint Answers.

“Advice for buying my first car as a college student”

If you’re looking for a cheap, reliable car and don’t care too much about being unique, then you’ll want to get a Honda Civic or Accord. When I shop for a car, I aim for a one-owner car with less than 70,000 miles. A college student with a slightly more limited budget may have to settle for a two-owner car. $5,000 or $6,000 can get you a GREAT used car. If you have a sharp eye, you might find some good cars around $4,000, and I personally would not go lower than that, or else you can expect a seriously old car or some serious problems.

I used to lease new vehicles every two years, but I’ve bought two used cars in the past couple years instead. One was a 2001 Saab Viggen Convertible for $9,000, and the other a 1998 Chevy Blazer ZR2 for $4,000. I found both of those cars on Autotrader.com, and then searched the entire internet (including ebay) for their VINs to find more info. I also considered BMW, Audi, VW (beware particular models!), and Honda.

Car-specific online forums are extremely useful! Once you know what year and model you’ll be buying, as an example, search the web for “1998 Blazer common problems” and you might find a thread like this (50,000 views!) which lists all common issues. You will know what to expect, and you will likely return to that thread find out how to fix something when it does break (or at least be armed with some information when you take it to a mechanic).

Avoid cars that tend to attractive abusive drivers, like the BMW 3 Series, which is often driven aggressively by young male drivers. Try to find a car that was driven by a mild-mannered older person. You should ask the seller to give you a free independent mechanic inspection report, and after you buy the vehicle, immediately take it to the manufacturer’s dealership and see if they will give you a free inspection (Saab gave me a free inspection on a 7 year old, out-of-warranty car).

If you want to know how much you can expect to sell your car for when you’re done with it, search for the car you want to buy, but add 24,000 miles and a few years. Generally speaking, domestic pick-up trucks and entry-level Japanese cars hold their value the best (Honda Accord, Toyota Camry). Domestic family cars (Ford Taurus, Chevy Malibu) lose value the quickest. Check out this chart–notice that the Taurus lost 80% of its value over 7 years, while the Camry only lost 60%.

This website is ugly, but has some good advice: www.carbuyingtips.com

Remember, there are a lot of used cars out there! Don’t be afraid to make firm offers on cars and walk away when you are turned down. Let them call you back. And, you can always sell the car if it gives you trouble–you’re not stuck with it.

If you are seeking professional help with your debt troubles, there are three primary types of help you can get. This comic produced for Mint.com provides an overview of the debt help available.

Throughout the year, a variety of things that affect your income taxes can happen. In the United States, a personal income tax return is a set of forms provided by the Internal Revenue Service (IRS) which most residents are required to complete every year. Most financial transactions and important life events will be entered into your tax return so that you can calculate exactly how much income tax you owe to the federal government.

Typically, you pay some amount of income tax through withholdings (see What is: Withholding) throughout the year, but your withholding amounts are only estimates. After you complete your tax return, you’ll find out how close the total withholding is to your actual tax owed.

Typically, each of your paychecks shows deductions for Social Security, Medicare, federal tax, and state tax. These items amount to your withholding–the portion of your pay that is withheld. These amounts are sent by your employer to the Internal Revenue Service (IRS), an agency of the U.S. government.

At the end of the year, you’ll receive a form that shows the total amounts withheld from you throughout the year. The information on this form will help you complete your tax form, which will determine the size of your tax refund or balance due.

The depreciation of new cars:

On average, the prices of vehicles dropped 11.7% each year for the first three years, and only 7.6% each year for the following four years. You can find the best value by buying vehicles that are three to seven years old. It is more difficult to obtain extended maintenance plans for used cars older than seven years or with more than 70,000 miles.

UPDATE: November numbers are now available. The SAAR for November 2009 was 10.93 million vehicles.

General Motors entered bankruptcy and..
Sold: Hummer (to Sichuan Tengzhong Heavy Industry Machine Co), and Saab (to Spyker Cars N.V.)
Discontinued: Pontiac and Saturn

Chrysler entered bankruptcy.

Ford did not enter bankruptcy, but…
Sold: Aston Martin, Land Rover, Jaguar, and Mazda.

The only brand showing positive sales growth (for which stats were available) from 2005 to 2008 was Mazda, with a +0.5% CAGR. Cash for Clunkers clearly had a fleeting impact on sales, essentially shoring up some demand at the expense of near-future sales.

The two best selling domestic vehicles are Ford F-150 (#1), and Chevy Silverado (#4). The remaining top 5 are Japanese mid-size or compact sedans.

The Total U.S. Light Vehicle Sales chart shows that domestic brands visibly lost market share to all other brands over the past decade.

Credit card companies allow card holders to pay a minimum payment—a set percentage.   This makes the payment more affordable but ultimately allows the credit card company to collect huge amounts of interest

Congress recently passed the Credit Cardholders’ Bill of Rights Act of 2009 to protect consumers against unfair interest rate changes and fees.  Five out of 99 attending senators voted against the bill, and four did not vote.  Two of the five “Nays” were from South Dakota, the state where most credit card companies are headquartered due to the state’s lack of a statutory limitation on credit card interest rates and other favorable conditions.  A few days after the vote, Pres. Obama signed the Credit Card Accountability, Responsibility, and Disclosure (CARD) Act of 2009.

Still, some call for legislation forcing credit card companies to increase the minimum to 5%  to protect consumers from excessive interest.  Chase Bank has voluntarily raised its minimum payment requirement from 2% to 5% on certain cards.  This increase causes difficulty for those who cannot afford the new payments; many pundits are framing Chase Bank’s action as consumer abuse, but it’s actually the prudent thing to do.  In the long run, it will keep consumers’ interest charges from growing out of control.

There is a key relationship between the interest rate and the minimum payment.  For example, at 19.5%*, the effective monthly interest rate is 1.496%.  Compared to a minimum payment of 1.500%, this means that almost none of the payment is applied to the initial $10,000, as shown in the graphic.  Interest adds up at almost exactly the same pace you pay it down meaning that it would take about 5,000 years.

*Interest calculated using an average daily balance method with monthly compounding.

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Created to mark the release of the first published comprehensive overview of the brain fitness industry, the SharpBrains Guide to Brain Fitness.

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