$1 of Credit Card Debt After 100 Years

Fighting against credit card debt is an enormous task.  The compounding of a 19.99% interest rate is hard to defeat.  Even a $1 of credit card debt will spiral out of control if left unchecked.
    Okay that maybe a little dramatic, but it doesn't take too much credit card debt to make your life a lot harder.  Debt left on a credit card would double in less than four years and it would take only thirty-five years for a $1,000 debt to reach over $1,000,000.  With an initial $1 debt, you could have bought a house and a yacht with your debt in 75 and 100 years respectively.
    Below is more of an illustration more than reality, but the numbers are very real.  It just won't happen, because no credit card company would let you rack up this amount of debt without making any payments on your balance.


Advertisement

Credit Card Nerd Math

A 19.99% interest rate that is compounded monthly will compound at a rate of 21.9% annually.  (1+ 19.99%/12)12 = 1.21927115021%, but we will round down to 21.9%.
    In thirty-five years a dollar of credit card debt would grow to $1,023.60.   The math works like this: $1 x (1.21935) = $1,023.60.  Which still doesn't seem like much, but if you started with a $1,000 debt it would be just over a million in thirty-five years.
    It would take only seventy years to turn $1 of credit card debt into a million dollar debt.  The math works like this: $1 x (1.21970) = $1,047,754.16
    In a century your $1 debt would grow to $398,447,000.52.  The math works like this: $1 x (1.219100) = $398,447,000.52
    Below we have a chart with the year, the amount of credit card debt at the end of the year and what your debt could buy.  For this chart we used an annual inflation rate of 3%.



$1 in Credit Card Debt

$1 of Credit Card Debt Compounded

Year

Credit Card Debt

What it Would Buy

1

$1.22

Soda Can

2

$1.49

Soda Can

3

$1.81

Soda Bottle

4

$2.21

Large Coffee

5

$2.69

McDouble

6

$3.28

Double Cheeseburger

7

$4.00

4 Chocolate Bars

8

$4.88

2 Large Coffee

9

$5.94

2 Extra Large Coffee

10

$7.25

Dozen Donuts

15

$19.50

3D Movie Ticket

20

$52.49

Prime Rib Meal

25

$141.28

2 Prime Rib Meals

30

$380.29

NHL Ticket

35

$1,023.60

2 NHL Tickets

40

$2,755.17

60" TV

45

$7,415.95

2 Roundtrip Flights to Europe

50

$19,961.14

Caribbean Vacation for 2

55

$53,728.39

A Good Used Car

60

$144,618.00

Honda CRV

65

$389,260.97

Ram 3500

70

$1,047,754.16

BMW 760

75

$2,820,187.10

1200sqft House

100

$398,447,000.52

143ft Yacht



Advertisement

A Wake Up Call

In reality no one will have a credit card debt that will grow to this extreme, but the above chart does show you the cumulative damage of not paying down your balance and letting it grow over time.
    You don't even have to start at year one either.  A $2,755.17 debt will grow to $7,415.95 in five years if for some reason the credit card company allowed you to not make any payments on your credit card.