Understanding the Cost of Credit Card Debt Many people carry balances on their credit cards. Since credit cards tend to have high-interest rates relative to other kinds of debt, purchasing things on credit and not paying them off right away can be a very expensive habit. Use the "Debt Payoff Calculator" tab (the second tab) on the Loan Calculator Download Loan Calculator spreadsheet that you used earlier to answer the following questions: 

Assume you have a $5,000 balance on a credit card that charges 18% annual interest, and that you want to pay it off over the next 5 years (round all answers up or down to the nearest dollar and don't use dollar signs):

 How much do you need to pay each month? How much total interest will you pay over the 5 years? Assume you have a $5,000 balance on a credit card that charges 24% annual interest, and that you want to pay it off over the next 5 years (round all answers up or down to the nearest dollar and don't use dollar signs): 

How much do you need to pay each month?