Personal Finance Basics — A useful tool or an expensive trap, depending on how you use it.
A credit card is a short term loan. Used well it builds credit and earns rewards. Used badly it is one of the most expensive forms of debt there is.
Pay your full statement balance every month. If you do, you pay zero interest on purchases thanks to the grace period. If you do not, interest starts piling up fast.
APR: Annual percentage rate: the yearly interest charged on any balance you carry. Card APRs are often very high, sometimes above 20 percent.
Paying only the minimum keeps most of the balance accruing interest. A balance that feels small can take years to clear and cost far more than the original purchase.
Rewards and cashback are only a real gain if you never pay interest. Otherwise the interest dwarfs the rewards.
15 practice questions with explanations. Free, and no account is needed to start.