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Personal Finances / Credit Cards and Consumer Debt
|Subject: The Power Of Compounding||Date: 2/5/2013 9:00 PM|
|Author: nagdabbit||Number: 306762 of 309250|
Ah, you might think this is all about saving, earning your worth and tucking some away. Reading the Fool and all..
But I just learned a different take on it...the benefits of Compound Interest depends on whether it's Incoming or Outgoing.
I didn't know this before, haven't had credit card balances that weren't paid in full for years, been doing reward credits on it.
Received a disclosure change from a CC company.
Part of one paragraph clearly stated that '..this is compound interest'...speaking about
'Every month your Balance and outstanding Interest are used to calculate the interest that we will charge you.'
Interest on Interest???
Wasn't particularly highlighted, but it was in there.
This was in the middle of, near the center of, toward the top of the long part, but inbetween the other part, of the part that stated the changes in your account.
Now, this, in my opinion, contained blah blah with clear points if you Really Read It -
No examples were shown however for folks who wouldn't know how this works.
Granted, they did try to spell it out in simple clear terms, so as to be as transparent as possible. :-) Play Nice.
All well and good if you have the Means to Pay off your bill in full every month.
I'm sorry - prob. mistakes in this post but this
'Tisses me off!
I have been there, using a CC to Build Credit years ago.
But some might be looking at 22+% interest.
If you are looking to build your credit, keep a balance for a month or two - gosh, what the heck does it cost you?
And for those unable to pay the whole amount -
All I can say is I think this is a stupid mistake by the CC companies...you can't compound the interest - these folks will never get out of debt and you will find your company holding the bag again.
And gee, who will pay?
US (stands for United States)
I'm cancelling that CC
and giving them feedback.
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