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Yesterday I received a notice in my mail from my credit card company. The notice said that the Default APR was going to change to 31.99%. Now, I never pay attention to interest rates because I always pay my balance in full. But, I looked at this fine print (see below) and thought, “Holy cr^p!” Do people actually pay 31.99%? And then I thought of a relative of mine. I know she has $50,000+++ credit card debt. So, I created a program to calculate how much interest she’ll pay if she’s paying 31.99%. This is what I came up with:
If you have $10,000 cc debt @ 31.99% interest, the minimum payment is $15, and you make the minimum monthly payment, it would take you 368 months to pay it off. And, you’d pay a total of $35,899.
If you have $50,000 cc debt @ 31.99% interest, the minimum payment is $15, and you make the minimum monthly payment, it would take you 528 months to pay it off. And, you’d pay a total of $182,532.
I found this shocking and sad. How many people are really paying 31.99%?
Fine print from notice: Rates, fees, and terms may change: We may change the rates, fees, and terms of your account at any time for any reason. These reasons may be based on information in your credit report, such as your failure to make payments to another creditor when due, amounts owed to other creditors, the number of credit accounts outstanding, or the number of credit inquiries. These reasons may also include competitive or market-related factors. If we make a change for any of these reasons, you will receive advance notice and a right to opt out in accordance with applicable
If you have $10,000 cc debt @ 31.99% interest, the minimum payment is $15, and you make the minimum monthly payment, it would take you 368 months to pay it off. And, you’d pay a total of $35,899.
If you have $50,000 cc debt @ 31.99% interest, the minimum payment is $15, and you make the minimum monthly payment, it would take you 528 months to pay it off. And, you’d pay a total of $182,532.
I found this shocking and sad. How many people are really paying 31.99%?
Fine print from notice: Rates, fees, and terms may change: We may change the rates, fees, and terms of your account at any time for any reason. These reasons may be based on information in your credit report, such as your failure to make payments to another creditor when due, amounts owed to other creditors, the number of credit accounts outstanding, or the number of credit inquiries. These reasons may also include competitive or market-related factors. If we make a change for any of these reasons, you will receive advance notice and a right to opt out in accordance with applicable
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