The Dark Side: Debt

Compounding works in reverse too, and credit card companies know it. A $5,000 balance at 24% APR, paid off with minimum payments, takes nearly 20 years to clear and costs more than $8,000 in interest. You hand back $13,000 for that original $5,000.

The same math that builds millionaires destroys borrowers. Every day you carry high-interest debt, compound interest works FOR the bank and AGAINST you. Kill high-interest debt before you invest — paying off a 20% APR card is effectively a guaranteed 20% return, with no risk.