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Author: Bottles Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 308858  
Subject: Re: Double Billing Cycle Date: 4/1/1998 11:42 PM
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<< It's best to not carry a balance and avoid the confusion.>>

I Agree with you. But not all people dont have that luxury. Maybe this will help explain what I mean.

Start Balance $1000.00 Jan 1.
APR: 18.9%/Daily Periodic rate: 0.05178%
Assume: 5% min payment Required

Two Billing Cycle
Billing Intrest Payment New
Cycle Days Accured Req Balance
Jan 30 15.53 0.00 1015.53
Feb 28 14.72 51.51 978.74
Mar 31 15.71 0.00 994.45
Apr 30 15.45 50.50 959.40
May 31 15.40 0.00 974.80
Jun 30 15.14 49.50 940.44
TOTAL 91.95 151.51

Traditional one billing cycle
Billing Intrest Payment New
Cycle Days Accured Req Balance
Jan 30 15.53 50.78 964.52
Feb 28 13.98 48.92 929.58
Mar 31 14.92 47.23 897.27
Apr 30 13.94 45.56 865.65
May 31 13.90 43.98 835.57
Jun 30 12.98 42.43 806.12
TOTAL 85.25 278.90

The credit card company adds 7.2% to the money they would make off of you in this scenario. and your over all balance is 14.3% higher than it would be even just paying the minimum. That means your paying much longer on it and end up paying more intrest costs.

The big selling point to some consumers is they get away with only paying only 45% of what you would have had to pay using the traditional monthy installment.

As Tony points out.. Who cares if your paying it off. But there are a number of us fools that are working on getting rid of the debt or ppl that havnt waken up to realizing they are just throwing money away.

Be aware though that some cards are lowering the grace periods on their cards or eliminating them outright. So even in Tony's case, you still would be paying intrest on a charge the day its posted, regardless of wether you pay your card monthly.

Hope this helped...

Rob
Bottles
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