Primerica Outlines the Real Cost of Credit

Primerica Financial Services
Press Release
November 19, 2008

In today's economic crisis, many families already drowning in debt are now having to deal with excessive penalty fees for everything from missed payments to over‑limit spending. Some card providers are assessing penalty rates as high as 32% for these credit missteps. In fact, it's estimated credit card providers will collect more than $19 billion in these fees in 2008.1

Primerica, an industry leader in financial services, shows clients how to better manage their debt by first understanding the fundamental differences between revolving2 and fixed3 debt.

Fixed Debt Can Save Money
Most credit card debt is “revolving” debt. Because of the way the interest is calculated, it's difficult to tell how long it's going to take you to pay off the balance. Revolving debt is compounded when additional monthly charges are added to the balance.

With installment loan debt, payments are scheduled for a fixed amount payable over a specific period of time. It's easy to tell when the entire amount borrowed will be paid off and – even with a similar interest rate and monthly payment amount – the pay‑off date will generally be much sooner than with a comparable revolving account.

For example, if a client charges $15,000 on a credit card with a 15% interest rate (APR) and pays $525 per month, it will take 15 years to pay off the debt and the client will have paid an additional $8,156 on top of the initial charge.

With an installment loan (fixed), the same loan amount of $15,000 with a 15% APR, with the same $525 per month payment will take the client just three years to pay off – and they've only paid an additional $3,674 on top of the loan.

With a fixed loan, the client could save more than $4,000 in interest and pay off the loan in three years instead of 15!

Protect Yourself
In an age where “easy credit” is not always what it seems, it pays for clients to be educated about the credit cards in their wallet. Failure to manage credit cards could wreak financial havoc.

Primerica has solutions to help clients manage credit wisely and take back control of their lives. Visit Primerica Financial Solutions for more information.


  1. Assumes revolving payment (minimum) of 3.5% of the remaining balance or $20, whichever is greater. First month's payment is shown and term assumes continued payment of minimum amount. No additional debt incurred and payments decrease over a time period.
  2. Assumes payment of 3.5% of initial loan amount, no additional debt incurred and payment amount remains fixed throughout the term of loan. This illustration is hypothetical only. Each debt situation will vary.
  3. USAToday.com, September 17, 2008
Arizona: Loans solicited by Limited Partners in Primerica Financial Services Home Mortgages Limited Partnership of Arizona (Primerica Financial Services Home Mortgages, Inc., General Partner. 6135 North 7th Street, Suite 201, Phoenix, AZ 85014. Mortgage Banker License No. BK 15594). Loans originated by Citicorp Trust Bank, fsb. California: Primerica Financial Services Home Mortgages, Inc. Loans arranged pursuant to a Department of Corporations, California Finance Lenders License. Connecticut: Primerica Financial Services Home Mortgages, Inc., MORTGAGE BROKER ONLY, NOT A MORTGAGE LENDER OR MORTGAGE CORRESPONDENT LENDER. Delaware: Primerica Financial Services Home Mortgages, Inc., (PFSHMI): A Delaware Licensed Mortgage Loan Broker. Florida: Licensed Florida Mortgage Broker/Representing: Primerica Financial Services Home Mortgages, Inc., Licensed Mortgage Brokerage Business. Georgia: Primerica Financial Services Home Mortgages, Inc. (PFSHMI), 3120 Breckinridge Blvd., Duluth, GA 30099: A Georgia Residential Mortgage Licensee, License #6078. Illinois: Primerica Financial Services Home Mortgages, Inc. (PFSHMI), 3120 Breckinridge Blvd., Duluth, GA 30099: Illinois Residential Mortgage Licensee. Citicorp Trust Bank, fsb, the lender, would provide the funds for these loans. Citicorp Trust Bank, fsb, not PFSHMI, is the entity which affects the availability of funds. Interest rates or charges for loans are in no way recommended, approved, set or established by the State of Illinois. Kansas: Kansas Licensed Mortgage Company. Primerica Financial Services Home Mortgages, Inc. 3120 Breckinridge Blvd., Duluth, GA 30099. License No. 96-209. Kentucky: Representing Primerica Financial Services Home Mortgages, Inc., 3120 Breckinridge Blvd, Duluth, Georgia 30099. EQUAL HOUSING OPPORTUNITY. Maine: Primerica Financial Services Home Mortgages, Inc., Loan Broker License #CSO07173. Massachusetts: Primerica Financial Services Home Mortgages, Inc., Massachusetts Mortgage Broker License Number MB 0056. Minnesota: Representing: Primerica Financial Services Home Mortgages, Inc., Minnesota Residential Mortgage Originator. Missouri: Primerica Financial Services Home Mortgages, Inc. (PFSHMI): A Residential Mortgage Licensee. Montana: Primerica Financial Services Home Mortgages, Inc., 3120 Breckinridge Blvd., Duluth, GA 30099, license number 000381. Nebraska: Primerica Financial Services Home Mortgages, Inc. (PFSHMI): Licensed as a Mortgage Banker. Nevada: Primerica Financial Services Home Mortgages, Inc., 9055 West Post Road, Las Vegas, NV 89148; 702-870-3200. New Hampshire: Licensed by the New Hampshire Banking Department. New Hampshire Mortgage Broker License Number 5367-MBR. New Jersey: Primerica Financial Services Home Mortgages, Inc. (PFSHMI), 3120 Breckinridge Blvd., Duluth, GA 30099-0001, (770) 381-1000: Licensee, New Jersey Licensed Lenders Act, Licensed Mortgage Banker, Licensed by the New Jersey Department of Banking and Insurance (Certain Locations). PFSHMI does not make any mortgage loan commitments or fund any mortgage loans. PFSHMI arranges loans with 3rd party providers. (1st/2nd) Citicorp Trust Bank, fsb, the lender, would provide the funds for these FIRST OR SECONDARY MORTGAGE LOANS. New York: Representing Primerica Financial Services Home Mortgages, Inc. New York State Banking Department, 3rd Party Mortgages arranged, Registered Mortgage Broker. North Carolina: Loans solicited by Representatives of Primerica Financial Services Home Mortgages, Inc. Oregon: Primerica Financial Services Home Mortgages, Inc. (PFSHMI), License Number: ML-131. Pennsylvania: PFSHMI - Licensed by the Pennsylvania Department of Banking as a Partially Exempt First Mortgage Broker. Licensed as a Secondary Mortgage Loan Broker. Rhode Island: PFSHMI: A Rhode Island loan broker licensee. Texas: Primerica Financial Services Home Mortgages, Inc., Financial Services Company #71355, 3120 Breckinridge Blvd., Duluth, Georgia 30099-0001, 770-381-1000. Virginia: Primerica Financial Services Home Mortgages, Inc., Licensed as a Mortgage Broker by the Virginia State Corporation Commission, License #MB-1504. Washington: Washington Mortgage Broker Practices Act Licensee. This document is not intended as an offer to extend credit nor a commitment to lend. The loan interest rates, fees, and terms presented herein are for illustrative purposes only and may not be currently available. This document has been prepared to assist real estate professionals in illustrating some of the financing options available to consumers.

Lenders and Primerica Financial Services Home Mortgages, Inc. are affiliated companies of Citigroup. Loans secured by residential real estate. Loans secured by residential real estate are made by Citicorp Trust Bank, fsb. Unsecured loans made by Primerica affiliates Citibank, N.A., Citibank, F.S.B., Citibank (West) FSB, and Citibank Texas, N.A., Equal Housing Lenders. All loans subject to credit approval. Not available in all states.EQUAL HOUSING OPPORTUNITY.