Office of Student Aid : Loans : Managing Your Loan Debt : Credit Card Basics : Credit Card Risks

Running up debt on your credit card(s) and/or not making payments can impact your life for many years to come. Negative marks on your credit report--which remain for seven years--can limit or prevent you from:

• Renting an apartment
• Buying a home
• Purchasing a car
• Completing your education (i.e., ability to borrow an alternative educational loan, if required)
• Finding a job--many employers now look at credit reports before hiring

Paying only the minimum payment is not a wise financial decision and could cost you almost double the amount of the principal before it is paid off:

• If you accumulated $3,000 in credit card debt at 18% interest and made only the minimum payment of $60 per month, it would take you 7 years and $2,411 in interest to pay it off.
• If you increased your monthly payment by just $30 to $90 per month, you would be able to pay that $3,000 credit card debt off in 3 years and 10 months with $1,107 in interest--a savings of $1,304.