I don’t think i’ll be painting tonight. I opened my Visa bill around 7 or 7:15… Now, I had paid it off in full last month. The payment always takes a couple of days to process, on the side of the bank (which is a load of crap i think. It’s all done by computer. The only reason i see for a delay is to get a couple of extra days to charge interest. Of course I’m sure the banks have 101 excuses and reasons). Regardless of all this, the payment was processed more than a full week before the due date. When i opened the envelope, I expected to see a balance of 0$. Not so. There was a balance of $2.95.
I called, and was told that even though i payed before the due date, interest is still charged from the time i get the bill until it is payed. Now that makes sense, in an evil sort of way. As i had always understood it, interest would only be charged on a balance not payed by the due date. Otherwise why even have a due date? Instead just say, ‘this is what you owe us now. pay it soon cause its going up daily’. The due date is just an opportunity to make you pay an additional fee every month if you forget to pay.
Here’s what i propose as fair.
- Lets say you owe $200. Interest rate is, for simplicities sake, 24%/yr
- Your bill is printed on the 7th of the month, you get it by the 14th, and its due by the 30th
- On the 20th you pay $100. Your balance is now $100.
- On the 31st, the bank sees you still owe $100, so your charged $2 Interest, making your balance $102.
- The next bill, printed the 7th, is for $102. You get it the 14th, pay the 20th, and the balance is $0
- On the 30th, the bank sees the balance is $0, and enjoys its $2 and your prompt payment.
- No further bill are sent. (until you use the card again, of course)
In the banks version you would
- pay interest on the full 200$ until the 20th
- receive another bill next month for $100 plus approx $3.33 Interest.
- So you pay $103.33 on the 20th
- the next month receive another bill for (guesstimate) $1.50
- You get angry and refuse to pay. Interest on interest is illegal, but they can charge penalties for non payment.
- Next month you get a bill for $1.50 for the previous balance, plus 1.95 service fee.
- You decide to just pay it and get on with your life. you pay by the 20th.
- The next month you get another bill for $0.13 (interest on the service fee for 20 days)
- You decide to go live as a hermit in Alaska to escape the evil of banks.
Anyway so now i also lost almost 2 hours, and don’t really have time to get any painting done tonight. I like to have at least 4 hours to paint so i can really get into it and not let all the paint dry on the palette. I think i’ll go draw instead 😀