With the news of the banking bailout fresh in my mind, I was not shocked when I was notified by my credit card company that my interest rate was going to go up. Thinking ahead, I was prepared to obtain the money elsewhere and to pay it off when the change was made. Now it seems not to be quite so simple.
First, this credit card was obtained by my husband and me sometime in the early 1970's. On two occasions, we received spontaneous notices from the company that our interest rate was being lowered because of our prompt payment history. Through all these years, we always paid more than the minimum payment and always before the due date. We had other credit cards and many other offers but limited our use to emergency spending and travel, using store and bank credit where needed and allowing the other cards to languish in a dresser drawer unused.
When my husband died three years ago, I used this card to consolidate the sundry bills for medical expenses with which I was left but the balance was still only half the allowable credit limit and I continued to pay more than the minimum each month. I could have continued with the company at the higher rate but I refuse to pay 18-34% for money I can get from the bank at 8%.
This understood, I sent a check and a bank draft before the due date of payment sufficient to cover the entire balance. And so, I was rather shocked when the statement from that company arrived this month with a finance charge of over thirty dollars. When I called to inquire I was told that this was for the interest that was computed on a daily basis for the days after billing and before receiving the payment. This the situation which gives rise to my dilemma.
If I send them the thirty bucks, will that be the end of it? It would seem likely that I will be billed next month for the interest on the interest that accumulated prior to payment. This would give rise to the question of how many times I may be billed for interest on that interest. If I refuse to pay it on the basis that I had paid the amount that was billed, how long will they continue to bill me for the interest on the interest? How much can I play with them before they ruin what is left of my credit rating?
This may seem a small amount over which to quibble but, as they say on the daytime "judge shows," it's the principle of the thing. But, knowing that is it OUR tax dollars which saved their existence, one is not inclined to contribute further to their rip-off. I have reached the conclusion that they are simply not programmed for being paid off.
They do not want the total balance to be paid off, not ever! They want us to continue to owe them, to continue to pay the minimum and, in the process, to have the interest added to our indebtedness so that they will have a larger amount that can be leveraged and rebuild their own credit. They can then call it a profit and their stock will go up, their CEO and other executives can have a raise, and all we sheeple can continue to buy, pay only the minimum each month, and learn to love imported Chinese cat food.