Master Credit Cards
Before They Master You
Five interactive tools to understand how credit really works — from your first purchase to reading your statement.
Checking Account
$500
Available cash
Credit Card Balance
$0
Owed · $500 limit
Utilization
0%
Balance ÷ limit
This Month's Charges
No charges yet this month.
Your Scenario
Debt
Balance Owed$500
APR (Annual Rate)22%
Payments
Monthly Payment$25
Typical first-time cards carry APRs of 20–30%. The U.S. average in 2024 was about 21.5%.
Total Interest Paid
—
—
Time to Pay Off
—
—
Total Amount Paid
—
—
Adjust the sliders to see your personalized breakdown.
Choose your response to each scenario:
↺ Reset Scenarios
💳 Scenario 1
You bought $300 in new clothes on your credit card (APR: 24%). Your statement arrives and you can afford to pay the full $300 — but the minimum is only $25. What do you do?
🎉 Smart move! Paying in full means zero interest — the grace period protected you completely. Your $300 clothes cost exactly $300. This is the golden rule: pay your full balance every single month.
😬 Ouch. Paying only the minimum on $300 at 24% APR takes about 15 months and costs roughly $68 in interest — so those clothes actually cost you $368.
⏰ Scenario 2
Your credit card bill is due tomorrow and you just remembered. It's 10pm. You have the money in your checking account. What do you do?
✅ Crisis averted! Online payments post same-day or next business day. You avoided a $30–$40 late fee and protected your credit score.
💸 Late fee incoming. Even one day late triggers a $25–$40 late fee. Reach 30 days late and it gets reported to all three credit bureaus — staying on record for 7 years.
📊 Scenario 3
You have a $1,000 credit limit. Your balance is already $850. You want to charge one more $100 purchase. Should you?
🧠 Credit-savvy! At $850 you're already at 85% utilization — well above the 30% recommended threshold. Adding $100 more would push you to 95%, which can drop your score by 50+ points even if you pay on time.
📉 Score hit. Charging $950 of a $1,000 limit means 95% utilization. Experts recommend staying under 30% ($300 on a $1,000 card) for a healthy score.
🔍 Scenario 4
You want a rewards card and a store card. A friend says you should apply for both in one afternoon. Good idea?
👍 Wise approach. Each application creates a "hard inquiry." Spacing them out shows lenders you're not desperately seeking credit. One inquiry typically drops your score just 5–10 points.
⚠️ Double hit. Two hard inquiries at once signals potential financial trouble. Combined, they can drop your score 15–20+ points.
Your Credit Score
680
Fair
Action History
↺ Reset
— Take an action to see results —
FICO Breakdown
35% — Payment History
30% — Credit Utilization
15% — Length of History
10% — Credit Mix
10% — New Inquiries
Click an action to see its impact:
✅ On-time Payment
Paid bill before due date
+12 pts
❌ Missed Payment
30+ days late, reported to bureaus
−85 pts
💳 Maxed Out Card
Used 95% of credit limit
−60 pts
📉 Paid Down Balance
Brought utilization under 30%
+35 pts
🔍 Multiple Applications
Applied for 3 cards in one month
−25 pts
📅 Long Account History
Kept oldest card open for years
+8 pts
☠️ Sent to Collections
Unpaid debt sold to a collector
−110 pts
🏆 6-Month Streak
Six consecutive on-time payments
+45 pts
Credit Score Basics
What is a Credit Score?
🔢
A Three-Digit Number
Your credit score ranges from 300 to 850. The higher the number, the more financially trustworthy you appear to lenders, landlords, and banks.
🏦
Shows You're Trustworthy
A higher score signals to banks and lenders that you reliably repay what you borrow — making them more willing to lend to you at better interest rates.
🏠
Crucial for Loans & Apartments
Your score is checked when applying for mortgages, apartment leases, and personal loans. A low score can mean rejection or a required co-signer.
🚗
Beyond Just Loans
Your score can also affect approval for car loans, smartphone installment plans, insurance premiums, and even some job applications.
What Makes Up Your Score?
Five factors, each weighted differently — understanding them is the key to improving your score.
Payment History
The single most important factor. On-time payments build your score; missed or late payments damage it severely and stay on your report for 7 years.
35%
Amounts Owed (Utilization)
How much of your available credit you're using. Keeping utilization below 30% signals you're not over-relying on borrowed money.
30%
Length of Credit History
Older accounts and a longer average history boost your score. This is why keeping your oldest card open — even unused — matters.
15%
Credit Mix
Having a variety of credit types — credit cards, student loans, auto loans — shows you can manage different kinds of debt responsibly.
10%
New Credit (Inquiries)
Applying for multiple credit accounts in a short period triggers hard inquiries, each of which can ding your score slightly. Space out applications.
10%
First National Bank
Platinum Student Rewards Card
Statement Period: Jan 1 – Jan 31, 2025
Account ending in: 4821
Account ending in: 4821
| Date | Description | Amount |
|---|---|---|
| Jan 3 | Target Store #0842 | $47.23 |
| Jan 9 | Spotify Premium | $11.99 |
| Jan 14 | Chipotle #1133 | $13.50 |
| Jan 20 | Amazon.com | $34.99 |
| Jan 28 | Payment — Thank You | −$50.00 |
| Jan 31 | Interest ChargeBecause you didn't pay your full balance last month, the bank charges interest on the remaining amount. | $8.74 |
Previous BalanceWhat you owed at the end of last month's billing cycle.
$230.00
New Charges
$107.71
Payments Made
−$50.00
New BalanceTotal owed now: old balance + new charges + interest − payments.
$296.45
Minimum PaymentThe smallest amount to keep your account current. WARNING: paying only the minimum means months of interest charges.
$25.00
Payment Due DatePay by this date to avoid a late fee. Pay the FULL balance and you owe zero interest — that's your grace period.
Feb 22, 2025
APRAnnual Percentage Rate. At 24.99%, carrying a $300 balance costs about $7.50 per month in interest alone.
24.99%
Credit LimitThe maximum you can charge. Stay below 30% of this for a healthy credit score.
$1,000
Available CreditHow much more you can charge right now. Low available credit = high utilization, which hurts your score.
$703.55
💡 Hover over any underlined termLike this! Plain-English explanations appear for every financial term on this statement. for a plain-English explanation.
Reading This Statement: This person owes $296.45 and must pay at least $25 by Feb 22.
Notice that $8.74 in interest was charged because they didn't pay in full last month.
If they only pay the minimum again, they'll be charged more interest next month — and the month after.
This cycle continues until the full balance is paid.
© 2026 Peter H. Sullivan. This work is an original curation of public domain financial data. Non-commercial use is permitted provided that clear attribution to Peter H. Sullivan and a link to compass.phsullivan.com is included. Redistribution for profit or commercial gain is strictly prohibited. · Terms of Use