The hidden ways debt gets more expensive, even when you’re making payments

Article excerpt

Credit card interest rates have climbed to record highs, making even regular minimum payments an inefficient path out of debt. When cardholders pay only the minimum due each month, interest accrues faster than principal shrinks, a dynamic that keeps borrowers trapped in cycles of compounding charges. The article explores how banks structure minimum payments to maximize their own profit while minimizing a consumer's progress, and why financially savvy borrowers should understand the mechanics of how their debt actually works. With APRs approaching 30 percent in some cases, the cost of carrying a balance has become substantially steeper.