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What do credit cards really cost?

Credit card interest rates, also called APR, can take the "deal" out of any purchase if you don't pay your bill in full each month or just pay the minimum balance. The minimum payment due is about 2 to 4 percent of the total balance. Think about this: even with a 10 percent interest rate, a comparatively favorable APR, your minimum monthly payment wouldn't cover all the interest charged on that balance.

Here's the lesson: Paying only the minimum payment due could mean you never pay off your credit cards for your entire life.

Plus, the added expense of the interest charges, you could be paying thousands of dollars extra for a small charge.

Example: A $50 textbook over 20 years on a 22.8 percent APR card would cost $4,579.04.

At, from American Education Services, the following example is given of what happens when $50 textbook is charged.

Finance Period 10.8 percent 16.8 percent 22.8 percent
1 Year $55.68 $59.08 $62.67
10 Years $146.53 $265.17 $478.49
20 Years $429.39 $1,406.31 $4,579.04