How Economists Work How Expensive Credit Card Interest Rates Are

How Expensive Credit Card Interest Rates Are

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The reason self-control is so important when it comes to your finances isn't a moral or spiritual thing: it's a practical thing. Credit card interest rates are high, which can make financing your purchases expensive. If you don't have the money to pay cash for something in the first place, you probably don't want to make it even more expensive by adding interest to the price. If you buy an item for $1,000 using your credit card (with its 18% interest charge) and you only make the minimum payment every month, over one year you will end up paying $175 in interest. And to top it off, you will still owe $946 on your purchase.
Source: http://www.investopedia.com/articles/pf/08/recession-proof-your-life.asp; http://www.twopenniesearned.blogspot.com/