The average adult has at least two credit cards, likely department store cards or similar shopping cards, but some people have as many as ten credit cards for different stores and uses. This crazy amount of debt (or potential debt waiting to be released) can lead to a minimum balance carousel that can take decades to overcome, if it’s ever overcome. Here are a few bits of information that the average card-holder does not realise, because you have to read the fine print and scrutinise each monthly statement to find it:

1. Paying the minimum balance on a maxed out card each month will never result in a paid off balance, no matter how long you faithfully pay that minimum balance. Consider the following—if you owe just $2000 and make minimum payments of $20 each month (1 percent), and your interest rate is 15 percent (although it is likely much higher), your total repayment will be nearly $17000. In addition, it will take more than 30 years to reach this goal…as long as the average mortgage! The numbers for a higher interest rate or bigger balance just add time until payoff.
2. Most of the problem with paying the minimum balance is that interest alone eats up most of the payment. Instead of reducing the debt by a significant amount each month, it looks like you haven’t made a payment, and in most cases the amount of debt is actually increased after the new interest is accumulated. The APR (annual percentage rate) for the average person in the United States is currently 14.95 percent – and in Australia it is around 19%, but that number is for someone with good credit. If your credit is bad, or even not that great, then your rate may be significantly higher.
3. Miscellaneous fees can also increase your balance by an incredible rate each month, such as yearly fees, account management costs, taxes, over-limit fees, late payment rates, account transfer fees, cash advance fees, and so on. Some retailers, online and traditional, also charge a percentage fee for using a credit card as payment, such as airlines, online utility bill payment, and a host of other places.

For these reasons and others, your balance looks like it goes up every month, even if you pay the bill every month and quit using the card once you dedicated yourself to getting out of debt. At the beginning of our financial course to help you beat debt for good, one of the first things you learn is to cut up the cards to avoid temptation. This is great advice, but pay close attention to the debt amount each month as you establish a budget. Whenever possible, increase the payment amount in order to pay off this type of debt faster. Once a card is paid in full, cancel the account and snowball the savings to the next card, paying it off as fast as possible.

The best advice that I can give married couples, especially newlyweds, is to avoid the credit card trap altogether. Sometimes people make money mistakes and you may be going into marriage with credit card debt against you already, but if you don’t have any, agree with your spouse from the beginning to avoid credit cards completely. If you can’t afford it and can’t save up for it, chances are good that you don’t need it. Emergencies are different, but these special circumstances are rare, and this is what your savings should cover.

Bottom line, don’t get a credit card, and if you have one, pay it off as soon as possible and get rid of it.

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