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

If you only pay the minimum payment 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 the 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 utilization stays high, which can hurt your credit score. You also remain vulnerable to rate increases and fees. The debt can snowball if you continue spending on the card. Paying even a little above the minimum each month dramatically reduces the time and total interest paid on the balance.