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I Hate the Way Credit Card Companies Charge Interest

By JLP | April 19, 2006

I announced last month that we paid off our two credit cards. Well, at least I THOUGHT I paid them off. I received a statement for one of the cards today. It appears I owe an additional $2.54 because the 0% intro rate had expired and my average daily balance was $373.66. For some reason, I thought that if you paid the balance off during the month, the interest charges ceased. WRONG!

Oh well, overall I did pretty well. Over the last year, I think they got one late payment from me and $2.54 in interest. They housed my debt for a year and made $37.54 from it. Not too bad, if you ask me. I’m happy to not have any more credit card debt. It also pleases me to know that they won’t be getting ANY MORE OF OUR MONEY!

Topics: Credit Cards | 11 Comments »

11 Responses to “I Hate the Way Credit Card Companies Charge Interest”

  1. samerwriter Says:
    April 19th, 2006 at 2:58 pm

    Now that they’re paid off, though, you’ll love the way they charge interest!

  2. Paula Says:
    April 19th, 2006 at 5:25 pm

    I am a graduate student that also works at a credit card company. I am a customer service rep at Discover card. I understand what you are talking about when it comes to payoff. Interest accrues daily when you don’t pay in full every month. So by mailing in the balance statement you will stop any new finance charges but you will have a small balance of the interest from the time that the statement was mailed out until the balance payment is sent in. It is called residual finance charges.

  3. Says:
    April 20th, 2006 at 11:29 pm

    Weekly Roundup – 04/17/06

    Here are this week’s highlights from the MoneyBlogNetwork and beyond…

    JLP of AllFinancialMatters hates the way that credit card companies charge interest. It seems that one last interest charge posted to his account, delaying (ever so sli…

  4. » Around The Blogosphere » Consumerism Commentary: A Blog About Personal Finance Says:
    April 21st, 2006 at 12:29 pm

    […] JLP from AllThingsFinancial paid interest on his credit card balance this month. He’s not happy about it. […]

  5. Jerry Kindall Says:
    April 21st, 2006 at 2:08 pm

    Not to pick on Paula, but Discover in particular is bad for this because they use two-cycle average daily balance. That means you’ll have that residual finance charge for TWO months after you pay it off.

    I will agree that you’ll love how banks charge interest now that they’re paid off. Buy some stock in a big credit-card issuer. 😉

  6. shri_2006 Says:
    May 9th, 2006 at 6:03 am

    I fully agree with JLP. Credit card products have ruined lives of many gullible and innocent people. The way they charge revolving credits, the way customers fall prey to innumerable free-type offers, ultimately ends up in tragic scenes. I am sure Credit card need not be bad, but way banks have misutilised the whole process to garner amazing benefits is disheartening.

    A time has arrived for banks to create new products using the cheaper modes of on-line credits using reletively very inexpensive mechanism of Online Banking.

    I have tried to create some awareness at my blog,
    and I am sure that this will take us long way in facilitating the cheaper mode of credits to the convinience of customer

    Security is one great issue which banks are trying hard to contain.


  7. Mike in Atlanta Says:
    October 2nd, 2006 at 7:00 pm

    I think we are all used to the scams these companies can play on you if they choose to. BUT I hate it when they outright LIE!!!! Discover repeatedly lied and lied and lied, saying oh we will take off that fee, oh we will reinstate this or that…it was a lie FOUR TIMES IN A ROW…how stupid do you think I can be….both my Discover accts are now closed and they still billed me for every little thing they could get. Warning! Ive had dozens of cards over 30 plus years and never ever one nearly this bad…good ridance to a dying card!

  8. 401k rollover Says:
    October 10th, 2006 at 2:08 pm

    Interesting… you must be careful if you have a credit card which calculates your interest using the average daily balance method. I prefer the adjusted balance method because it simply adds up your purchases and other expenses and subtracts out your payments and other credits. Average daily balance in sneaky because making a large purchase on the first day of your billing cycle can cost you a bundle if you don’t pay it off within a few days. Congrats on being debt free!

  9. Michelle-Consumers Union Says:
    November 20th, 2006 at 5:55 pm

    It sounds like you got caught in the “teaser rate” trap where the credit card company gets you with an incredibly low interest rate that expires automatically, or skyrockets to 27% because of a late payment, bounced check or some other reason. That’s just one of the credit card traps that can trip up consumers and lead to spiraling debt. Consumers Union, the nonprofit publisher of Consumer Reports, has put together a lighthearted animated holiday-themed satire about abusive credit card fees and practices. Check out “It’s Always Christmas Time (for VISA)” at Be sure to take action after viewing the animation!

  10. ASAP Credit Card Says:
    December 6th, 2006 at 11:55 pm

    The credit card companies will eventually get you somehow! I’ve had this happen to me as well. I thought I had everything paid off– only to find out the interest charges weren’t added in yet. Luckily it was only a small amount, but I’m sure it could catch someone off-guard if they weren’t prepared for it.

  11. ASAP Credit Card Says:
    January 14th, 2008 at 3:43 pm

    We’d love to get your feed back. We recently started a poll on the Worst / Best Credit Card Issuers. Feel free to stop by and give us your opinions.