Which credit card payback strategy results in the highest overall cost to the borrower?

Making only the minimum payment each month results in the highest overall cost to the borrower due to the way interest accumulates on outstanding balances. When a borrower opts to make just the minimum payment, they are typically only covering the interest and a small portion of the principal. This means that the remaining balance continues to accrue interest, which can significantly increase the total amount owed over time. Additionally, if the borrower continues to make only minimum payments, it can take many years to fully pay off the balance, leading to even more interest paid in the long term. This strategy not only prolongs debt but also results in higher costs due to the persistent compounding of interest.

In contrast, paying off the balance in full every month avoids any interest charges altogether. Paying more than the minimum but not the full balance still reduces the principal faster than just making minimum payments, thus leading to lower interest costs over time. Using a balance transfer can also provide lower interest rates initially, further reducing costs compared to simply paying the minimum.