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/biz/ - Business & Finance

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540016 No.540016 [Reply] [Original]

Hey /biz/ so I just received my first credit card from the bank.

The interest rate is 20%

So I don't completely understand how this entire credit thing works, but the bank teller was saying that I can keep the credit companies from making a penny off of me if I just pay off what i owe.

So what happens if I make small payments rather than pay off what I owe??

For example, let's say I owe $100. I decide to pay the minimum of $25. Because the interest rate is 20% does that mean that my balance won't be 75 it will actually be ~93 because of the interest rate?

>> No.540021

The interest rate they tell you is the usually the APR (which is annual), but credit card balances tend to compound daily. In your example, your actual daily rate would apply to the $75, then the next day the rate would apply to the $75 + the previous day's interest.

>> No.540024

Just gonna skip to the most important thing:
Only use that credit card to buy small, cheap things and pay it off completely every month.

>> No.540025

>>540016
>dat fuckin hairstyle

>> No.540029

>>540021
so they are small increments per day?

That means if I let the $100 sit for a year it would be $120 by the end of the year?

>>540024
I only plan to pay my phone and internet using the credit card, also any purchases I need to make online. I shouldn't exceed 100 per month

>> No.540032

>>540029
>small increments per day
Yes.
>It would be $120 by the end of the year
No. APR usually doesn't take compounding into account.

>> No.540035

>>540032
So then I was lied to by the banker? She told me that I can get away without letting the credit card companies make a single penny as long as I paid it off before the due date!!!

>> No.540037

>>540035
No, the banker told the truth. If you pay off your balance in full before the end of the grace period (e.g. you pay off the full $100), you aren't charged any interest. If you don't, then you start getting charged daily interest.

>> No.540038

>>540037
awesome , I cume

>> No.540082

>>540037
Not in the US and this is such a jew plan
20% interest per day? Holy shit!
No wonder the jews love dumb americans so much, give a credit card to an idiot and enjoy the greatest income flow you will ever know.

>> No.540083

>>540029
>>540016
Always pay it all off when your statement comes in. Always. The point is to build a good credit score, by not paying what you owe on time you're doing the exact opposite. If you want to get real serious about it take usage into account as well.

>> No.540084

>>540082
it can't possibly 20% per day, in 10 days it would be 200% and nobody would ever sign up for that

>> No.540085

>>540082
Learn to read. 20% PER DAY? Do you seriously think that's what's happening?

Get a grip. Focus less on hating America and more so on not being a retard.

>> No.540086

>>540082
It's not 20% per day. Learn to read.

>> No.540105

its 20% / month. you have limited time to pay what you owe without any interest. it can be somewhere around up to 60 days.

>> No.540118

>>540105
>>540082

you fucking retards have to be trolls

>> No.540121

It's 20% monthly unless you pay up when it's due or before then. They make their money charging businesses a transaction fee and split some of it with you in the form of points, but if you don't pay up you get slapped with the interest rate on your balance compounding monthly until it's gone.

How do you qualify for a credit card and bother to get one but don't know this simple stuff?

>> No.540129

>>540016
>be me
>apply for gredit gard
>get letter
>"sorry m8, you don't actually exist, you have no credit record, fuck off".
o-ok.

>> No.540130

>>540121
>it's 20% monthly
No, it's not. The rate they quote you is annual pretty much always.
>how do you qualify for a credit card and bother to get one but don't know this simple stuff?
Why don't you?

>> No.540149

>>540084
>20% per day, in 10 days it would be 200%
<sigh>

No

It would be cumulative.

>> No.540162

>>540037

I'm a newfag to creditcards too, they jewed me into signing up for a creditcard by offering 20 shekels in store credit.

I plan on not letting them make shekels off of me by paying it off before the grace period every time.

My question is, is there a grace period after every purchase. or is it a one time thing?

So if I pay everything off within 21 days, I owe 0 additional shekels?

>> No.540165

>>540082

20% a year you silly goy!! Trust them, they're your greatest ally!

>> No.540166

>>540162
It's a recurring thing every month. All your purchases during the month becomes your balance due and you have a grace period to pay it.

>> No.540173

>>540162
If it helps, you can think about it like a utility bill. You use something during the month and then at the end you get a bill telling you how much you owe and when you need to pay by. It's like that.

>> No.540192

Just pay off what you owe or you pay shitloads in interest. It's simple.

>> No.540289

reading this thread would confuse the hell out of me.

use your card up to a third of the credit limit, payoff five days before its due and don't use it until five days after the due date.

tada, now you pay 0 percent monthly interest. and the credit card man feels trolled like he ought to be.

>> No.540391

>>540105

lmao it's obv 20% APY

20%/month is 2400% APY

that's illegal unless you're a payday loan company