Take a look at these situations.

NEED A CAR

You need a car and find a used car for $1,200 that looks pretty good and use a credit card to pay for it. Your card has an interest rate of 18.9% and they calculate your minimum payment at $48 a month. Okay, I can do that.

Well see what that car will cost you, if you pay the minimum each month.

That scared you? Okay pay $100 a month.

NEW CREDIT CARD

You managed to get a credit card and used it to pay for some books at school. No problem. $266 is not a huge debt. But then your car needed a repair the next week and that was over $300. Worse, you planned a weekend in Chicago at about the same time and managed to blow $400 without batting an eye. The next two months do not prove to be much different and you open the credit card bill and see $2,000 as the balance and a minimum payment of $80. You cannot believe it.

If you pay just the minimum payment each month, how long will it take to pay it off? Your rate is 18.9%.

See the difference if you pay more than the minimum payment and stick to $80 per month.

No way. What will it take to pay it off in a year?