Credit card interest

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MarkM's picture
MarkM
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Joined: Jul 22 2008
Posts: 755
Credit card interest

Do all credit card companies charge interest on balances that accrue through the month?  I could swear that, at one time,  if I paid the entire balance each month I was not charged interest.

Now I pay 25.99% on some computed balance even though I pay it off every month.  I may have a few late pays, but the entire balance is ALWAYS paid every month.

It is difficult to navigate in this world without credit cards.  I have one that I use for business and one for personal.  The business card may get several thousand in charges every month, but it is always paid in full.  Even so, I pay a few hundred dollars in interest.

25.99%??!!  Come on, that is loan shark money.  To me, it is just more evidence of the thorough screwing we are receiving, coming and going, by the big banks.  We really are nothing more than slaves to the system.

You may say to just stop the cards.  I could do that, and I may.  However, it really would be a big inconvenience.  Hmmm, I guess that is the plan.  Create a system that almost requires the use of something and then charge usurious rates on that "something".

rowmat's picture
rowmat
Status: Gold Member (Offline)
Joined: Nov 15 2008
Posts: 358
Re: Credit card interest

I dunno, I don't pay credit card interest.

I haven't for 20 years.

I have a debit card.

rowmat's picture
rowmat
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Posts: 358
Re: Credit card interest

MarkM wrote:

...We really are nothing more than slaves to the system...


If you are referring to credit card debt who forced you into 'slavery' besides yourself?

MarkM wrote:

...You may say to just stop the cards.  I could do that, and I may...


Well? What are you waiting for?

MarkM wrote:

...Create a system that almost requires the use of something and then charge usurious rates on that "something"...

"Consumption. This is the new national pa‮ts‬ime. F*ck baseball, it's consumption, the only true, l‮sa‬ti‮gn‬ American value that's left . . . buying things . . . People spending money they don't have on things they don't need . . . So they can max out their credit cards and spend the rest of their lives paying 18 percent interest on somethi‮gn‬ that cost $12.50. And they didn't like it when they got it home anyway. Not too bright, folks, not too f*ckin' brig‮th‬." - George Carlin

WARNING - Expletives in the following link...

George Carlin talks about a favorite American past time...CONSUMPTION!!

Here's a solution.
If you don't have the money now.... DON'T BUY IT NOW!
Save your money and then buy it when you actually have the cash or cut up your credit cards and get a debit card. And guess what? By the time you actually have the cash you will probably decide you don't need it anyway. See it's really quite simple.

Impulsive consumption is made possible by instant credit.

If you want an answer to something, don't look to a god, or a horoscope, or a sign in the sky... look to good 'ol George Carlin!

LogansRun's picture
LogansRun
Status: Diamond Member (Offline)
Joined: Mar 18 2009
Posts: 1372
Re: Credit card interest

MarkM wrote:

Do all credit card companies charge interest on balances that accrue through the month?  I could swear that, at one time,  if I paid the entire balance each month I was not charged interest.

Now I pay 25.99% on some computed balance even though I pay it off every month.  I may have a few late pays, but the entire balance is ALWAYS paid every month.

It is difficult to navigate in this world without credit cards.  I have one that I use for business and one for personal.  The business card may get several thousand in charges every month, but it is always paid in full.  Even so, I pay a few hundred dollars in interest.

25.99%??!!  Come on, that is loan shark money.  To me, it is just more evidence of the thorough screwing we are receiving, coming and going, by the big banks.  We really are nothing more than slaves to the system.

You may say to just stop the cards.  I could do that, and I may.  However, it really would be a big inconvenience.  Hmmm, I guess that is the plan.  Create a system that almost requires the use of something and then charge usurious rates on that "something".

I just noticed this myself for the past month.  I thought it was anomoly and have it on my list of things to call on......I'll now do that today. 

I also pay off my cc's every month and use them because I get sky miles which offsets much travel costs for my family.  I see no problem with using cc's if you pay them off every month (at least until now).  For those of you that don't use them, good for you but IMO you're not using you cash flow properly. 

I'll give an update on what the bank says.

EndGamePlayer's picture
EndGamePlayer
Status: Platinum Member (Offline)
Joined: Sep 2 2008
Posts: 546
Re: Credit card interest

Its called "predatory lending". EGP

PlicketyCat's picture
PlicketyCat
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Posts: 680
Re: Credit card interest

MarkM - I noticed two of my cards charge interest daily without grace period anymore, so I rarely use those cards anymore (one small purchase every 6 mos just to keep the account open). The other two still have a grace period... which is right up to the next billing date whether thats a day or a month from the purchase date (used to be any balance over 30 days, not any purchase within 30 days). So those two cards get paid off every month before my bill date... which negatively affects my FICO on those two cards because I'm not paying interest to buy a better score. It's a serious scam.

RNcarl's picture
RNcarl
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Joined: May 13 2008
Posts: 351
Re: Credit card interest

Well,

My wife was seriously angry at me when she saw the interest rate on her Amex.... She thought I wasn't paying the bill on time. I was...

"Mysteriously" the interest rate went up. 35.99% yup, that's what I said.

I have a "business" amex that is a corporate card and the company only pays twice a month. If I have a business expense that falls just right, and I am a day or two tardy in posting my expense report that "balance" gets carried over to the next month which accrues interest and a late charge. Amex (and others) use that info to jack up the interest on our personal account.........

Now, the interest on the corporate card is quite low and I usually can sweet talk my way out of the "late fee" BUT the damage has already been done!!!

My solution? I never put anything on my corporate card anymore. That will be a pain once I have to travel to the home office again. And, I have paid off the personal Amex balance.

NOTHING goes on credit anymore. If we don't have the cash.... It does not get bought.

I have a small HELOC that I am working on next and the 1st mortgage has only 9 years left. I figure with proper acceleration of the loans I will be totally debt free in 5 years unless I get caught in the lay-off tsunami

C.

nickbert's picture
nickbert
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Joined: Jan 14 2009
Posts: 1123
Re: Credit card interest

Hmm I had read a news item maybe a couple months ago that SOME credit cards were considering doing away with grace periods, but didn't realize some had implemented that so soon.  Can't say I'm surprised though.  Late last year when I made my list of possible scenarios and how to prepare for them, one of my early preparatory actions for a possible "Economic Collapse" scenario was to stop using our credit cards, with very limited exceptions (purchases made online, travel, and gas) and we always pay it off quickly.  LogansRun pointed out with some credit cards earn you rewards and airline miles and admittedly it does irk me to pass up earning those rewards, but I've concluded that those benefits are outweighed by the risks... namely the CC company pulling something shady, or possibly even going under and creating a messy situation of not knowing to whom or how to pay my balance.  Already my main CC did a shady thing earlier this year by moving my due date a week earlier without any notification, and just happened to make my payment come in a day or two late.  I called them up and demanded to have the late fees and finance charges removed, but it took 2 months and several calls to get the charges reversed (the reps always seemed baffled that the credit "hadn't gone through").  If I'd been using my card as frequently as before I would have had close to $1000 instead of just $200 on the card, and who knows how much more I would have had to fight with them to waive the finance charges and fees.  So after that BS I use the card even less now.  I understand for some businesses credit cards can be near-essential for placing orders and the like, but my personal opinion is individuals are probably best off transitioning away from credit cards entirely.  And as an added bonus the merchants I shop at won't have to pay the 1-2% fees involved with purchases.

- Nickbert

rowmat's picture
rowmat
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Posts: 358
Re: Credit card interest

nickbert wrote:

...  LogansRun pointed out with some credit cards earn you rewards and airline miles and admittedly it does irk me to pass up earning those rewards, but I've concluded that those benefits are outweighed by the risks...

Have you also concluded who actually pays for these so called 'rewards'?

Of course you do in the interest and fees you pay the CC companies.

Nothing is free.

Several surveys over the years have shown that so called credit card reward systems are no more than scams that trick people into believing they are getting something for nothing where in fact they are paying for it dearly through exorbitant interest charges and fees.

I remember that one survey showed that in order to receive enough reward points to get a $119 microwave oven for 'free' you had to spend $40,000 on credit card purchases.

The fact that most folks think they can't function without credit cards is just another facet of social conditioning.

Okay some pay off the monthly balance each month... but most don't.

nickbert's picture
nickbert
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Joined: Jan 14 2009
Posts: 1123
Re: Credit card interest

rowmat wrote:

nickbert wrote:

...  LogansRun pointed out with some credit cards earn you rewards and airline miles and admittedly it does irk me to pass up earning those rewards, but I've concluded that those benefits are outweighed by the risks...

Have you also concluded who actually pays for these so called 'rewards'?

Of course you do in the interest and fees you pay the CC companies.

Nothing is free.  <snip>

The people who keep a balance on their cards are generally the ones paying for the reward programs, and my CC company gets very little from me.  The only thing I've paid to them was one $60 annual fee in the past year and a half, and I've more than made up for that with enough miles for two (almost) free tickets, one of which I've already used.  So already it has been a net gain from my position, and I know many others who also pay off their balance every month on their airline cards and reap the airline rewards without paying anything aside from the annual fee.

That being said, yes I do agree with you that it's a subtle way to trick people into spending more on their cards so they'd find themselves holding balances... really it's not much different from any other 'loss leader' product, whether it's cheap eats at casinos or a heavily discounted computer at Best Buy.  If you know what you're getting into and stay aware of the conditions though, you can receive much more than you pay in.  But it does require some discipline, and from the banks' perspective there are enough people who don't have that discipline that make up for the ones that do.  And I do foresee these rules changing (no grace period, higher annual fees, etc) to the point to where this net gain will disappear or turn into a net loss no matter what I do, which is why I've largely stopped using the card and will cancel it before the next annual fee takes effect.  Their shady move with changing my due date without notice and the resulting hassle just made the decision easier.  But I made out quite well while it lasted.

- Nickbert

PlicketyCat's picture
PlicketyCat
Status: Platinum Member (Offline)
Joined: Feb 26 2009
Posts: 680
Re: Credit card interest

I try very hard not to use my "credit" credit cards anymore and rely on my "debit" credit cards instead (online purchases, gas, etc). Since I don't leave the house unless I'm absolutely forced to, cash really isn't an option for most things... yeah, and how about those new ATM withdrawal fees they're starting to reinstate?!?!? They either nail you at the machine, or you get an ATM fee on your statement, or (my favorite) they switch which type of account you have so they can charge you a monthly service charge!! And, of course, you get charged a fee for going inside or driving up and talking to a human teller as well. And check fees... more charges if you write too many, or any at all with some account types, etc etc. So much for getting & using your cash! 

RNcarl's picture
RNcarl
Status: Gold Member (Offline)
Joined: May 13 2008
Posts: 351
Re: Credit card interest

I found a "trick" lots of card companies must be using.

-- Just for fun, (frown) I started to read one of those "Privacy Notice" pamphlets you get either in the bill or separately in the mail about the "privacy" of your account. They start of benign enough.... "We want to inform you that we take your personal privacy seriously..." Then they tell you how much they are doing to stop identity theft and that they never release your information to "non-partner" companies (who are the partners?)

--- About that time is when your eyes glaze over and most folks (like me) stop reading ant the paper hits the shredder. BUT now is the time to START reading. This where (page 4-5 or so) they add the "oh by the way - gotcha" stuff. I.e. No more grace period; we can raise your rate if you have been late on any other payment - ever; we have doubled our fees. That type of stuff.

-- Citibank has taken over the "servicing" of Exxon/Mobil and Shell gas card accounts. They had our birthdays wrong so I couldn't pay on-line for the last few months. No problem, I used the "pay by phone" method. That is, until they started charging $14.95 just to use that service..... My wife loves to use her gas card to fill-up because that way she does not need to carry cash. It just seems that at every turn they make it hard to pay your bill on time.

C.

(edit for easier reading)

PlicketyCat's picture
PlicketyCat
Status: Platinum Member (Offline)
Joined: Feb 26 2009
Posts: 680
Re: Credit card interest

Another thing that Credit Card Companies like to do is send you a trial of something, and then automatically enroll you. All that "theft protection" and "income insurance" hooey you have to explicitly Opt-Out of if you let them even send you the packet. Double-check with your homeowner/renters insurance, because a lot of those do actually cover you for fraudulent charges if your cards are stolen, etc.... and at MUCH better rates. Banks are starting to automatically enroll you in these services whenever you get a new card or they re-issue you a card on expiration of the old one. Last month, my husband was 1 day late paying his bill because their website was down for maintenance (he's completely paperless with them). Anyway, that left a $1.15 late interest as the balance... well, this month, the bill was over $15! Interest on the interest, AND the "balance protection" fee... which charges a flat rate for every $100 even though there was only a dollar and change of *interest* on the card.

nickbert's picture
nickbert
Status: Diamond Member (Offline)
Joined: Jan 14 2009
Posts: 1123
Re: Credit card interest

Article pertaining to the aforementioned 'dirty tricks'.  Makes me feel better about my recent decision to abstain from my credit cards...

Credit Card Firms Try Out New Squeeze Tactics

http://redtape.msnbc.com/2009/07/when-james-received-a-great-credit-card-offer-two-years-ago-a-499-percent-interest-on-balance-transfers-for-the-life-of.html#posts

- Nickbert

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