Usury. A word many Americans are clueless about. A word that has not been used in far, far, FAR too long. A word I'm about to get intimately involved with.
Early this week, I received one of those "Important Information About Your Credit Card" brochures. Normally, I give it a quick scan, sigh about how the rate has changed or the payment schedule, and pitch it.
Not this time.
This time, I read the following paragraph:
SUMMARY OF CHANGE: The method of calculation of the Finance Charge on your Account will change from applying a Daily Periodic Rate ot the Average Daily Balance of the Account for the billing period (simple interest) to compounding interest daily during the billing period. We will calculate the Finance Charge for each day by multiplying the Daily Balance in your Account by the Daily Periodic Rate (the current Annual Percentage Rate divided by 365) to get your Periodic Finance Charge to your Daily Balance to get the beginning balance for the next day.
Translation: Get out the lube, baby, 'cause we are about to go to town on your ass!!
Here is yet another example of how de-regulation basically screws us. It's now okay to charge daily compound interest (meaning if I owe $10, they calculate interest for $10, add that to the $10 - let's say $1 -, and then the next day calculate interest on $11). Aaaggh!
This particular card is similar to a department store card. But it's only a matter of time before Visa/Mastercard/Discover and American Express jump on this gravy train!
We need federal credit card company regulation, not state, so credit card companies can't pull this BS by incorporating in "friendly" states and charging not only outrageous interest rates (32%, anyone?), but compounding the interest daily so there is no hope AT ALL of paying off a card.
I know there's going to be those who'll say I brought this on myself; maybe I did. I don't have a problem paying interest for the use of someone else's money for a while; I make my payments on time and in the requested amount.
But this is ridiculous!
You load 16 tons, what do you get?
Another day older and you're deeper in debt.
St. Peter, don't you call me, 'cause I can't go -
I owe my soul to the company store....