Credit card companies extend credit, or rather, LOAN you money on the expectation they will be paid back. You are borrowing money from the bank or institution that has extended the credit card to you. REMEMBER: If you don’t pay it back, the bank wants something in return and it’s in the form of interest.
STOP using your credit card for purchases when you do not have the money to pay off the balance when you receive the bill. Even small amounts remaining on a card costs you money. Money that you could be using for other important things, such as food, shelter, college education, or saving towards retirement.
If you are an average household, you are carrying an outstanding credit card debt of $8,000. With an APR of 16%, the average U.S. household, is paying approximately $1,280 in interest every year to their credit card provider.