Kelly had a credit card just for emergencies and she never bought anything on the spur of the moment. Kelly’s limit was $2,000 and she had been paying the minimum payment per month because she wanted to pay it off in full. She hadn’t used it for so long and thought that with her monthly payments she would have paid it off by now. Kelly didn’t realise the interest rate was 18.5%.

Kelly rang the Credit and Debt Help Line who explained to her that even though she had not bought anything on her card recently it would take her about 7 years to pay off the card because she was only paying the minimum monthly payment.

This was because of the interest she was paying which was $820. Once Kelly realised this, she started making more payments on the card so that it wouldn’t take so long to pay off and she would pay less interest.