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Credit cards often carry high interest rates that allow a minimum payment that can extend loan payment out for years. It is important to manage your expectations of this kind of debt from the very first—at the cash register. If you do choose to carry a balance on your credit card, you should be aware of the total long-terms costs, and your ability to pay off this debt with your current budget.

Below are some examples of the costs of carrying credit card balances with various interest rates. Notice how long it will take the borrower to conquer some of these debts:

Debt Rate Payment Time Cost
$5,000 24 percent $250 per month 26 months $6,448.96
$5,000 24 percent $300 per month 20 months $6,142.60
$5,000 15 percent $250 per month 23 months $5,789.53
$5,000 15 percent $300 per month 19 months $5,641.73
$5,000 15 percent $500 per month 11 months $5,374.57
$10,000 24 percent $500 per month 26 months $12,897.93
$10,000 15 percent $500 per month 23 months $11,579.05

More information is available at Money-Zine, which has a great Debt Reduction Calculator tool which allows you to see what your debt load and borrowing costs are really costing you.

Remember also: The total dollar amounts shown at right are not all-encompassing costs. There are other costs associated with carrying large amounts of debt, even if you are being dutiful and paying it off to the best of your abilities. There are opportunity costs—opportunities lost where the money you are spending servicing your debt, paying back both principal and interest, could be going to other things in your life, including savings for your future, your retirement and so on.

The costs are real, though, too: In the first example, to borrow $5,000 with a credit card ends up costing $6,448.96. That is $1,448.96 in extra expense, all to have access to $5,000 immediately. This is both an opportunity lost, and a real, significant expenditure.