🎯 Goal: Understand credit cards and avoid the debt trap.
You understand a credit card is "spend now, pay later"; paying in full on time usually means no interest, but paying only the "minimum" drags debt out as interest stacks.
Let’s explore
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A credit card lets you “spend now, pay later”. Handy but easy to overspend.
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Pay in full on time and you usually owe no interest. Pay late/partial and the interest is very high.
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Safe rule: only spend within what you can fully repay each cycle — treat it like your own money.
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Why "minimum payment" is dangerous: Owe 10M, ~2.5%/month interest. Paying only 500,000d/month, the remaining 9.5M is charged ~237,000d next month. The debt shrinks very slowly — possibly years, and you pay far more than the 10M principal.
Practice activity
💭 Why can paying only the “minimum” each month keep you in debt for a long time?
Worked example: You owe 10 million on a card and pay only the “minimum” 500,000d monthly; the rest is charged ~2.5%/month. Because interest stacks, it can take years to clear and you pay far more than the 10 million.
Quick quiz
1. A credit card lets you?
→ Spend now, pay later
2. To avoid card interest you should?
→ Pay in full on time
3. The safe rule with a card?
→ Only spend what you can fully repay
4. Owe 10M on a card, pay only 500k/month minimum?
→ Debt drags on, interest stacks
5. Paying the full balance on time usually?
→ No interest
6. You should spend on a credit card within?
→ What you can fully repay each cycle
🎯 Real-life mission
Find out the consequence of paying only the credit-card “minimum”.