HapiMoney

Credit cards are 1 part genius, 2 parts evil. Credit card companies make their money in 2 ways:

1) They charge stores and merchants for the ability to even accept credit card payments in the first place- between 2% and 5% of every transaction goes through payment processors, payment gateways and the lending bank. Ever wonder why you can get “cash back” on a card? Your creditor is basically forcing the merchant to give you a discount. Clever, no?

2) They hope and pray that the consumer keeps a balance on their card. That way they can gouge you with 12% interest rates for the convenience of their loan. It’s about as close as you can get to a legal loan shark.

So why are you carrying a balance on your card? If you have the cash, pay it off now, and if you don’t have the cash, use every last dime you can afford to start paying it off. Avoiding paying 12% interest rates is the economic equivalent of making an investment that appreciates that same amount every year.  Credit card companies make it insanely easy to carry this balance, so don’t let them trap you.