What happens if I only pay the minimum on credit cards?

If you only pay the minimum each month, you'll carry a balance that accrues interest, typically at rates between 20-30% APR. Most of your minimum payment goes toward interest rather than the principal, meaning your actual debt shrinks very slowly. A $3,000 balance at 24% APR with a 2% minimum payment could take over 20 years to pay off and cost thousands in interest. Your credit score can also suffer if your balance stays high relative to your credit limit, which hurts your credit utilization ratio. You're technically avoiding late fees and default, but the long-term cost is significant. Paying even a little more than the minimum each month dramatically reduces the time and interest you'll pay overall.