What happens if I only pay the minimum on my credit card?

If you only pay the minimum each month, you'll carry a balance that accrues interest, often at rates between 20-30% APR. This means most of your minimum payment goes toward interest rather than reducing your actual debt. 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 raises your credit utilization ratio. You'll stay trapped in a cycle where the debt barely shrinks. The only real benefit is avoiding a late payment penalty, but financially, paying only the minimum is one of the most expensive habits you can have.