The True Cost of Credit Card Interest
Credit cards charge some of the highest interest rates of any financial product (15-30% APR). Paying only the minimum means most of your payment goes to interest, not principal. A $5,000 balance at 22% APR with minimum payments takes over 20 years to pay off and costs $7,000+ in interest.
Minimum Payment Trap
The minimum payment (usually 2% of balance or $25, whichever is greater) is designed to keep you in debt longer. It covers interest with barely any principal reduction. Always pay more than the minimum to make real progress on your balance.