residual finance charges

[pianistimo]

ok.  normally we like to pay credit card bills off in entirety every month - but, if we don't - obviously we get revolving interest (accrued daily) instead of that leeway of having the bill entirely paid each month.  so, anyway - we finally got to a point this summer that we could pay the entire bill off - and paid the full amount.

well, the next bill comes and instead of being zero - it gave us $201. of 'residual finance charges' for the months before when it was a revolving account.  probably no big news to most people - but it was a shock to me that it was charged at the end (after full payment).

make sure and pay ur credit card bills entirely every month or you'll lose bukoo bucks to these stupid things. 

also - what i don't understand is that the interest rates on the cards keep going up even though you might pay one in full.  why?  why don't they give you a better rate if you pay it off.  ask for better rate after you pay a credit card off (and maybe lower the credit line - to keep yourself qualifying for the best low rate?)  just an idea. 

**how can they automatically higher your credit line if you don't ask for it?  i've been asking for mine to be lowered.  it's just a big risk to take a higher line of credit anyway. 

[thalbergmad]

In England, the market for credit cards is extremely competitive. There are thousands of them.

Is is possible to owe thousands of pounds and never pay a penny in interest by continually swapping cards to benefit from a 0% introductory rate. If you are going to borrow on one, you must play the Banks at their own game.

It is possible to pay off a card in full and still be charged interest. Many credit card companies give you 2 payment required by dates. One to pay the balance off in full and one by which a minimum payment must be made.

Somtimes, the payment in full date is only a week or so from the date you received your statement, making it very difficult to avoid charges. With some cards, you even have to overpay in order to avoid the interest charge taking you back into the red.

I worked for a bank for 20 years and it was the selling of these things that convinced me to leave.

People have killed themselves over debt.

Anyone who watched BBC1 last night would be wise to take note.

Thal

[pianistimo]

good advice!  i didn't realize about the separate payment dates for full payoff vs. partial payment. 

i'm starting to hate these credit card companies and write 'robbers' on the front of the envelope.  of course, with homeowner's association i change the HOA to HOAX.  they probably just laugh.  it's my way of consoling myself.  sometimes i rip up the envelope and feel better and send it again in a clean envelope - but once the mailman takes the mail i can't retrieve anything written on the outside.

[ted]

I have one credit card with a bare minimum limit which I use solely for buying the odd thing on the internet. I just plop whatever I spend into it straight away, it's never in the red and all I have ever paid on it is the $10 a year fee for having it. The bank is always sending me letters saying what a valuable customer I am and suggesting I should increase my limit to a ridiculously large amount.

It takes a while for the message to sink in with these people that I am not interested in borrowing money, but rather in lending money, for which privilege they are going to pay me an appropriate amount of interest or else I shall take my custom elsewhere.

I agree with Thalbergmad that the way banks are encouraging people into habits of debt instead of saving, especially the young, is morally reprehensible. 

[johnny-boy]

I keep getting mail from my credit card company telling me I qualify for the $100,000 platinum plus card.

If I would max that card out, I wonder what my finance charges would be each month. Also, if I only made the minimum payment there wouldn't be enough years left in my life to pay it off. Crazy credit card companies.

If I get a terminal illness maybe I'll take them up on it.

John

[thalbergmad]

I keep getting mail from my credit card company telling me I qualify for the $100,000 platinum plus card.

If I would max that card out, I wonder what my finance charges would be each month. Also, if I only made the minimum payment there wouldn't be enough years left in my life to pay it off. Crazy credit card companies.

If I get a terminal illness maybe I'll take them up on it.

John

I once interviewed a 19 year old man at the Bank I used to work for.

He owed £30,000 on several different credit cards. We put a payment plan in place looking at what he could afford, which indicated that he would be still paying off the debt in 25 years time.

Whilst i do blame the banks for the way in which credit cards are sold and marketed, there does seem to be widespread consumer ignorance. It used to amaze me that many of the people i used to deal with, had nothing to show for all the debt they were in and had no idea what they had spent the money on.

As i said before, if you are going to borrow on one, keep swapping.

Thal