The impact of interest on credit card debt can be significant. 

For example, suppose a consumer carries a balance of $5,000 on a credit card with a 20% APR. 

In that case, they will be charged $1,000 in interest over the course of a year.  

That’s $83.33 per month added to their balance just in interest charges.

The high-interest rates associated with credit card debt can lead to a debt spiral.  

When a consumer carries a balance on their credit card and makes only the minimum payment each month, the interest charges add up quickly, making it difficult to pay down the debt. 

As the debt continues to grow, the interest charges increase, making it even more challenging to pay down the debt. 

This cycle can continue indefinitely, leading to a significant amount of debt and financial stress for the consumer.