Cost of Pizza

So you're hanging out with everyone on your dorm floor on a Thursday night and having fun. A few people mention they're getting hungry and you decide it would be a good idea to buy pizza for the whole party. You've got you're brand new credit card, and a good time like this is the perfect occasion to break it in.

Well, just in case you don't have a math major for a roommate, we'll tell you why that's a bad idea.

Let's say you use your credit card and charge up $50 a month on stuff that you don't really need. $50 isn't that much, it's just over $10 a week (Pizza, maybe some lunch, a new CD here and there). If you can pay off that $50 every month, fantastic. But what happens if you pay only the minimum? If you charged $50 each month and made the minimum payment each month (about 3%, or around $10) with an interest rate of 18%, in one year you would have paid about $85 in interest and you would still owe, to your credit card, a remaining unpaid balance of over $500. Which would you rather do - pay the $50 and not have to worry about it, or still owe $500 at the end of the year?

Imagine going on a bad date and putting it on a credit card. If you paid in cash, you'll never have to think about that again, but if you charged it, you could be reliving that date for years to come.