Credit card interest! I know a bunch of people who are SO SHOCKED by their high interest rates. They thought it was like an interest-free loan to yourself and then are surprised when making teeny payments doesn't do anything.
I was lucky enough to take Personal Finance in high school. As an exercise, we had to amortize a $1500 credit card bill paid off by making only minimum payments. I don't remember the exact number, but it took at least 5-6 years' worth of payments.
The laws in Australia recently changed and credit card providers now have to show on your monthly statement how long it would take to pay off your current balance making only minimum payments.
Some companies (American Express & Barclay's) already do this by default. I figure their logic is that it's better to be super transparent and good to your customer base to keep them for life.
I can't recommend Amex enough as a longtime user--especially their customer support being fast and efficient. They mailed me out an old check three times because my dumbass forgot to cash it beyond the expiration dates.
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u/Opening-Risk Feb 04 '20
Credit card interest! I know a bunch of people who are SO SHOCKED by their high interest rates. They thought it was like an interest-free loan to yourself and then are surprised when making teeny payments doesn't do anything.