Would You Mortgage a Sandwich or a Pair of Shoes?

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You say no. But many people actually do this. It is when they use a credit card to pay for something, and then only pay the minimum payment. Yes. A lot of people do pay more than the minimum. But statistically? The vast majority of people who use credit cards only pay the required minimum payment. The reality is, regardless of what they have bought with the credit card, they just mortgaged their purchase. That's right. If you only pay the minimum balance, it will take you 30 years to pay it off. That sandwich at McDonald's. That new pair of shoes. School supplies for the kids. That emergency car repair. It is all mortgaged if you paid with a credit card and only pay the minimum balance each month. Aside from that, consider one other thing. Mortgaging a house has a much lower interest rate. A house will typically cost you three or four times more than what you bought it for. But with credit cards interest rates run well into the 25+% range, meaning your sandwich and shoes and school supplies for the kids and that emergency car repair will cost you roughly 10 times to 20 times what you paid for it. Things to think about the next time you whip out a credit card and decide how to pay it back.