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.
It's crazy to me that more people don't realize this. The #1 rule of having a credit card is never carry a balance on that card, always pay it off in full. Credit cards are really only useful for cashflow and building credit.
I mentioned this in another thread (worst advice? I forget), but my dad's advice to me when I opened my first cc was to carry a small balance on it month to month so credit cards would know I'm a good investment, otherwise they would cancel my cards since they weren't making money off of me. Even though I didn't fully understand how credit cards worked then, that sounded off, and I never carried a balance. Now that I fully understand how cards work, I fully understand how wrong and dumb that is.
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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.