Graphic The true cost of credit
What you really pay when making minimum payments
![](/us/en/wfw/articles/manage/fw/the-true-cost-of-credit/_jcr_content/mainpar/toplevelgrid_75386624/col1/textimage/image.580.png/1572449758905.png)
Suppose you purchase a $400 plane ticket for vacation and charge it to your credit card, which has an 18% interest rate.
![](/us/en/wfw/articles/manage/fw/the-true-cost-of-credit/_jcr_content/mainpar/toplevelgrid_75386624/col2/textimage/image.580.png/1572449851379.png)
Instead of paying off the balance in full, you make the minimum payment each month of $15.
![](/us/en/wfw/articles/manage/fw/the-true-cost-of-credit/_jcr_content/mainpar/toplevelgrid_75386624/col3/textimage/image.580.png/1572449898583.png)
By the time you pay off the balance, after almost three years, you have paid $115 in interest for a total cost of $515.*
Charging to a credit card may seem like an easy way of making a big purchase in the moment. However, paying down such purchases can be a long and expensive process if you make only the minimum payments.
Key Takeaways:
If you make only the minimum payments, it can take years to pay off even a modest credit card balance.
Make sure you understand your card’s key terms, including its interest rate, fees and policies.
Your minimum payment may be calculated as a percentage of your balance or as a flat dollar amount, depending on the terms of your card.
The best practice is to pay your balance in full each month so that you don’t accrue any interest.