When using credit cards for quick personal loans beware of the fine print!
Card loans may offer reduced interest rates, but missed payments can result in interest rates reverting to the card’s higher rate. Credit card balances can quickly blow out and take years to pay off.
Let’s do the maths:
- Card balance: $5,000
- Interest rate: 18%
- No fees or further purchases
By paying the minimum monthly amount ($102 then decreasing), it would take 33 years to pay off at a total cost of $17,181 (including $12,181 interest)!
You’re right in thinking that’s an extreme – but interest can easily get out of hand. Stay in control and read the fine print!