You may have a credit card maxed out at its $5,000 limit. And because of other debt and slow sales you are only able to pay $100 per month. Also assume the current interest rate is 15 percent.
If you pay only $100 monthly without adding a single additional purchase, it will take you nearly 6.5 years to pay off that $5,000. At the end of that 6.5 year, you will have spent more than $2,700 in interest charges.
That's not the worst of it. In addition to paying all that interest, you've lost the chance to invest the money. If you had invested the average monthly interest charge over those 6.5 years in an investment that earned an eight percent return, you would have earned more than $1,750 in the same period of time. What did those credit card purchases cost you, really? Adding what you paid in interest ($2,700) plus what you could have earned in an investment ($1,750), your cost was about $4,450! That $5,000 credit card debt really cost you $9,450.