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Financial

The Interest Monster

A credit card balance is a monster with a simple diet: it eats interest first. Feed it the minimum and it stays for years.

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Kara, 34, Mid-City. The holidays left one card with a $3,000 balance at 24 percent APR, an example rate a shade above the current average for cards that carry a balance. Each month she picks a payment: this card's $90 minimum, or more.

VIDEO

How the monster feeds

Every month the card charges interest on what Kara still owes. Her payment covers that interest first. Only the leftover shrinks the balance. Your job: find the payment that starves it.