Costs to Use Credit

Interest

Interest is an extra cost you pay when borrowing money using credit. Interest is the cost of borrowing money from banks or credit card companies. Interest is a rate or percentage based on how much money you borrow.

Interest rates on credit cards can be very high. Interest is added to the amount you borrowed. Quickly paying back the money you owe means you will pay less interest.

Multiple red credit cards and one that is gold. On top of the gold card there is a graphic that reads 7%.

Late Fees

It is important to make credit card payments on time. A late fee is charged if you make late credit payments or skip payments. A late fee is a penalty for not making credit payments on time.