The No. 1 mistake Americans make with their credit cards—it’s like ‘owing money to a loan shark,’ expert says

The biggest mistake you can make with credit cards is to carry a balance every month, financial planners say.

While credit cards are a convenient way to spend money, they have punishingly high interest rates that now average 20.75%, according to Bankrate’s most recent data. This rate — known as annual percentage rate — is up from an average of 16.40% two years ago.

Compared to the single-digit interest rates you can get with other loans or mortgages, APRs on credit card debt are “exorbitantly high,” says Noah Damsky, a chartered financial analyst and principal at Marina Wealth Advisors. As such, carrying a balance can feel like “owing money to a loan shark,” he says.

To avoid wasting your money on interest, it’s best not to carry an outstanding balance on your credit card, if you can.

With high-interest credit cards, it can be hard to pay off debt quickly even if you make just the minimum payments each month. That’s because the typical minimum payment is mostly interest — as much as 90% depending on how it’s calculated.

In effect, minimum payments merely prolongs the length of time will owe money while also increases the amount of interest you pay. For example, it would take 277 months of minimum payments to pay off a balance of $5,000 on a credit card with 20% APR, according to CBS News. Over that period, you’d pay $7,723 in interest on a $5,000 loan.

“Paying the minimum balance each month is not a good practice for the same reason that failing to pay off the balance each month is the biggest mistake you can make with a credit card,” says Daniel Masuda Lehrman, a certified financial planner. In both cases, any unpaid balance will compound with interest, making it “exponentially difficult to pay…