Credit card interest rates average 16-25% APR. Interest is calculated using daily periodic rate (APR ÷ 365) on average daily balance. Minimum payments (1-3% or $25 minimum) create debt trap - $5,000 at 20% APR with 2% minimum takes 15+ years and $6,400+ interest.

Grace period only applies when previous balance paid in full - carrying any balance forward causes all new purchases to accrue interest from transaction date. Balance transfers with 0% APR for 12-21 months can save thousands. $10,000 at 22% APR costs $2,200 annually in interest, while balance transfer with 3% fee ($300) saves approximately $2,600 during 18-month promotional period.