I Paid How Much?

by C.C. Owens

Is there something you’d like to buy right now? Maybe it’s the latest video game or that perfect outfit you saw online. If only you could have it now and pay for it later. That’s what credit cards let you do. Sounds perfect, right? Well, there’s a catch.

Let’s say what you want costs $100. Your allowance is $10 per week. It would take almost 3 months to save for it, so you buy it with a credit card. Over the next few weeks, you go to the movies twice and have pizza with your friends. Your credit card bill arrives, and you’ve only set aside $10. You promise you’ll do better and leave $90 unpaid. When your next bill comes, it says you owe $91.11. Why did the balance increase?

Credit card companies charge you interest if you don’t pay the full amount during your “grace period”—that’s usually 30 days. Since you manage to save only $10 each month, it takes you 11 months to pay off your balance. When you add all your payments together, you realize you paid $106. The extra $6 was the interest you paid, more than half a week’s allowance, and you had to keep paying for 11 months!

Even though, you’re not old enough to own a credit card, you ARE old enough to learn about credit cards. One day you will have the choice to buy something right then on credit or save for it and pay cash. When that day comes, do you want your money to go into the hands of the credit card company or into your own pocket? What will you decide?

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C.C. Owens uses her experience as a teacher to encourage her readers in simple, practical ways. Her current writing projects include inspirational devotions and whimsical children’s books. C.C. lives in South Carolina with her husband Robin, where they can be found gardening, hiking, and cycling.