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Question about credit card interest

gpister 2,235 134 September 2, 2016 at 10:07 AM
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I have a simple question and kind of confusing as how they judge the interest. So parents had a credit card and got a 0 APR for 2 years. I said since their is no APR being charge just pay the minimum so I did, not looking into the paper and trusting what seems pretty common sense I noticed that the balance at the end was around $350 (left due it was an overall starting balance of 4000 grand) however I been doing the minimum and all of sudden I see $2,000 on the next billing cycle dollar charge. I look into the paper and I guess the promotion ended without me paying the balance at full before the due date.

Now my question is that right? Payments have been done and it seems they charged full interest of the full amount (being $4,000 when it started) instead of maybe being an interest charge of about $80 (of the remaining balance which was like $350). I checked on the website and it said "EQUAL PAY/DEFERRED INTEREST".

I want to understand how does that exactly work charging full interest when the balance is almost paid in full. I called and was able to fix this I just paid whatever was remaining to end it just curious if what they did was right or wrong (basically the interest they charged which made me go wow).

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#2
yes, this is why in just about every case where a 0% promo is involved, it comes with the caveat of something like "make sure it's all paid off when the promo ends, or you will be hit with all the accrued interest."
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#3
I was pretty shocked so it is correct on their end I was just wonder if it only be the remaining balance not the starting balance. Lesson learn pay it full before the due date.
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just being slick
#4
Quote from gpister View Post :
I was pretty shocked so it is correct on their end I was just wonder if it only be the remaining balance not the starting balance. Lesson learn pay it full before the due date.
Yeah the cc companies write the agreement in their favor. No one reads the agreement. Somewhere saw if typical person read all agreements including end user license agreements would take 77 days out of the year.

I have had my CL decreased and then bumped my rate from 12% to 35% for missing few payments. The worst was it was not on NEW charges. Interest went up on PAST charges aka current balance. I was counting on having my cc limit the same. Really screwed me at the time.

I would call them up and act nicely at least initially. Keep saying supervisor supervisor supervisor. I might even hint at small claims court not sure it would do any good. Their practices are BS and extremely in their favor.

Cc companies are a bunch of "*7"(#"

Lesson learned write the agreement yourself whenever possible. The cc companies are a bunch of sharks. Don't trust them any further than you can throw them.
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#5
Quote from tennis4789 View Post :
Yeah the cc companies write the agreement in their favor. No one reads the agreement. Somewhere saw if typical person read all agreements including end user license agreements would take 77 days out of the year.

I have had my CL decreased and then bumped my rate from 12% to 35% for missing few payments. The worst was it was not on NEW charges. Interest went up on PAST charges aka current balance. I was counting on having my cc limit the same. Really screwed me at the time.

I would call them up and act nicely at least initially. Keep saying supervisor supervisor supervisor. I might even hint at small claims court not sure it would do any good. Their practices are BS and extremely in their favor.

Cc companies are a bunch of "*7"(#"

Lesson learned write the agreement yourself whenever possible. The cc companies are a bunch of sharks. Don't trust them any further than you can throw them.
Thanks for the response I just though by doing the minimum payments at the end it would even out (reason is I was doing another payment 0 apr and at the end I paid it and ended up good) here it was my mistake for not checking the bill statement. They were ok with it thank god no arguing just paid it and moved on now I know to check better the paper work.
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#6
Quote from tresh View Post :
yes, this is why in just about every case where a 0% promo is involved, it comes with the caveat of something like "make sure it's all paid off when the promo ends, or you will be hit with all the accrued interest."
Bingo. standard for 0% rates have accrued interest - don't pay it off within the grace period and WHAM all that interest goes right up your ass.
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#7
Quote from Dr. J View Post :
Bingo. standard for 0% rates have accrued interest - don't pay it off within the grace period and WHAM all that interest goes right up your ass.
made me laugh.
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#8
Quote from gpister View Post :
I was pretty shocked so it is correct on their end I was just wonder if it only be the remaining balance not the starting balance. Lesson learn pay it full before the due date.
I learned this lesson the hard way as well. I was about 19 and read the terms, but clearly didn't fully understand them. I put the 0% APR expiration dates in my calendar so I can make sure to pay it off before the promo term is up. If you really get stuck and can't pay it off, it's nearly always better to transfer it again to another 0% offer. The 1-3% in fees will cost you far less than the 27% interest that bank #1 will hit you with.
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As the username says ...

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#9
Quote from ManUpOrShutUp View Post :
I learned this lesson the hard way as well. I was about 19 and read the terms, but clearly didn't fully understand them. I put the 0% APR expiration dates in my calendar so I can make sure to pay it off before the promo term is up. If you really get stuck and can't pay it off, it's nearly always better to transfer it again to another 0% offer. The 1-3% in fees will cost you far less than the 27% interest that bank #1 will hit you with.
We all learn from experience what just got me off guard was I was expecting by doing the minimum payments it be paid off before the due date, but wasnt. What really surprised me is how they were ok to take out the fee if I paid the remaining balance in full I thought they were going to play hard ball.
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#10
Quote from gpister View Post :
I was pretty shocked so it is correct on their end I was just wonder if it only be the remaining balance not the starting balance. Lesson learn pay it full before the due date.
This is standard for any store-type CC for sure, maybe for the major CCs as well.
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Marshall: Have the rest of you guys figured out by now that mmathis is the smartest guy on SlickDeals?
#11
This is not the case for your average visa/mc/disco/amex card. This is more for care credit, store cards, etc.
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#12
Quote from tennis4789 View Post :
Yeah the cc companies write the agreement in their favor. No one reads the agreement. Somewhere saw if typical person read all agreements including end user license agreements would take 77 days out of the year.

I have had my CL decreased and then bumped my rate from 12% to 35% for missing few payments. The worst was it was not on NEW charges. Interest went up on PAST charges aka current balance. I was counting on having my cc limit the same. Really screwed me at the time.

I would call them up and act nicely at least initially. Keep saying supervisor supervisor supervisor. I might even hint at small claims court not sure it would do any good. Their practices are BS and extremely in their favor.

Cc companies are a bunch of "*7"(#"

Lesson learned write the agreement yourself whenever possible. The cc companies are a bunch of sharks. Don't trust them any further than you can throw them.
you dont have to read every line but it sure helps. they give you the important part up front. just most people dont bother. no one will let you write your own agreement. you agree to their terms or dont expect money from them. its clear you didnt know what you were doing.

if you lent someone money wouldnt you want it to benefit you? you are taking the risk you wont get anything back.
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#13
Quote from mgamer20o0 View Post :
you dont have to read every line but it sure helps. they give you the important part up front. just most people dont bother. no one will let you write your own agreement. you agree to their terms or dont expect money from them. its clear you didnt know what you were doing.

if you lent someone money wouldnt you want it to benefit you? you are taking the risk you wont get anything back.
Yeah I don't understand why people think that the agreements shouldn't favor the banks. It doesn't make ANY sense. They carry the risk -- and more risk than people realize. If you understood how many people get a credit card, rack it up to full credit utilization, and then dump it or file bankruptcy you would have an idea of why the interest rate jumps way up when you STOP paying them back THEIR money.... It's pretty common sense and the terms are pretty straight-forward.

Not that banks are always Mr. Nice Guy, but credit card interest reflects risk and it's not hidden at all from the consumer.

Missing payments is not as benign as people think. It's not YOUR money..... If someone stopped paying you and you didn't know if you'd get anymore money you'd probably not be very happy. The difference is the bank doesn't get mad, they just want their money. And if you can't pay there are consequences. Don't get all upset over it -- it's perfectly logical.
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#14
Fairly common in my experience. If you take advantage of one of these offers, you need to make sure you pay back in full well in advance of the end of the promo period. Banks prey on the forgetfulness and laziness of people on these things.

I always pay my bill in full each month, but on the rare occasion where I found it worth my time and effort to take advantage of a 0% promotion on a new card, I made sure I set an alarm and paid the thing in full TWO months before the end of the promo. I also called the CC company to confirm the end date of the promo. This way there is no debate as to the exact end date or the timing of the payment, when the check arrived, etc. With savings interest rates at 1%, 0% promos really do not have a lot of appeal imo to people who pay in full usually. And if you can't afford to pay in full, you should not be buying the item with a credit card. My 2 cents.
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