Money Fitness

• Interest rate is the percentage of additional cost added to your balance. Essentially you are paying for the extra time to use that money. ​

• It is based on how much of a cap you have on your credit card, the bank you're lending from, the type of credit card, and your credit score. ​

• Anytime you are borrowing money (using a credit card, taking out a loan, etc) there will usually be an interest rate. 

Example:

For example, if you borrow $5,000 at a simple interest rate of 3% per year, and you have it for 5 years, you'll pay a total of around $790 in interest. ​