Credit card interest question (I'm math-dumb)

**Eric Perry** · #1 01-06-2009, 03:35 PM

Okay,

I owe approx $13,500 on my only credit card I've ever owned. I know, I know... it's high. Whatever. Grad school ain't cheap, okay?

For whatever reason, a new Bank bought out my old CC account. Since then, monies applied to interest seem awfully high...

My interest rate is 14.99% (I got shafted on a payment getting there a few days late once and they rammed me on interest rate)!

Question is, last month I paid $350. The min. payment was I think $324. Well, $190 of that $350 went towards interest. That seems ridiculously high. Is that crazy-high, or is it normal considering principal / interest rate?

Thanks in advance!

fitbass3p · #2 01-06-2009, 03:38 PM

Well, there's something to consider:

14.99% of $13,500 is $2025 supposed interest.
Monthly, that's $168.75.
Wiggle in a few bucks for compounding interest, and it's not really all that far off.

MJ5150 · #3 01-06-2009, 03:46 PM

Eric....buddy...you should know better. Any thread of this kind always starts out with...."this friend of mine from work...."

-Mike

**Eric Perry** · #4 01-06-2009, 03:54 PM

Quote:

Originally Posted by fitbass3p

Well, there's something to consider:

14.99% of $13,500 is $2025 supposed interest.
Monthly, that's $168.75.
Wiggle in a few bucks for compounding interest, and it's not really all that far off.

Thanks. I don't like your answer, but thanks!

Quote:

Originally Posted by MJ5150

Eric....buddy...you should know better. Any thread of this kind always starts out with...."this friend of mine from work...."

-Mike

lol! Nope, in this instance, I'm the knucklehead solely to blame for that balance!

tplyons · #5 01-06-2009, 03:56 PM

Yep, perfectly normal. Credit cards make tons of money off people like you.

I pay no more than $20 in interest a month, but then again, I only owe a grand.

MakiSupaStar · #6 01-06-2009, 03:57 PM

Yeah that happened to me. call them up and negotiate your rate down. If they don't tell them that you'll switch cards.

Deacon_Blues · #7 01-06-2009, 03:58 PM

You've better turn that into a lower interest rate bank loan instead. That sum is too big to allow an interest rate like that. 15% interest is pretty normal to my understanding and doesn't mean many dollars per month on smaller credits, but on $13000, you end up with much higher sums.

Otherwise, even better would be to get rid of as much as possible of that credit. Is there perhaps something you can sell? Can you live with a cheapass car for a year, for instance? That could perhaps be a solution, unless you have a loan for a car as well.

tplyons · #8 01-06-2009, 03:59 PM

Quote:

Originally Posted by MakiSupaStar

Yeah that happened to me. call them up and negotiate your rate down. If they don't tell them that you'll switch cards.

+1... even if you can get yours down a few points, you could be looking at $40-50 a month saved on interest, which you could put towards your principle instead.

**Eric Perry** · #9 01-06-2009, 03:59 PM

Quote:

Originally Posted by tplyons

Yep, perfectly normal. Credit cards make tons of money off people like you.

I pay no more than $20 in interest a month, but then again, I only owe a grand.

People like me??? if that means "people that helped put themselves through graduate school with the help of a credit card", okay. If not, I think I take offense to that.

MakiSupaStar · #10 01-06-2009, 04:01 PM

Quote:

Originally Posted by Eric618

People like me??? if that means "people that helped put themselves through graduate school with the help of a credit card", okay. If not, I think I take offense to that.

I'm one of those people. It's killing me.

tplyons · #11 01-06-2009, 04:01 PM

Quote:

Originally Posted by Eric618

People like me??? if that means "people that helped put themselves through graduate school with the help of a credit card", okay. If not, I think I take offense to that.

That's what I mean. And I'm starting to do the same. I was just laid off, and have a semester left of school, just got a new car, and am paying off a motorcycle.

I'm charging groceries right now, trying to find a part time job to pay for my living expenses, but I can't afford anything extraneous. I'm having a hard time coming up with the scratch to pay for an extra class to graduate on time.

No offense intended.

**Eric Perry** · #12 01-06-2009, 04:03 PM

Quote:

Originally Posted by tplyons

That's what I mean. And I'm starting to do the same. I was just laid off, and have a semester left of school, just got a new car, and am paying off a motorcycle.

I'm charging groceries right now, trying to find a part time job to pay for my living expenses, but I can't afford anything extraneous. I'm having a hard time coming up with the scratch to pay for an extra class to graduate on time.

No offense intended.

Non taken.... Sorry, I initially did take it the wrong way. Just frustration. Sorry Tim.

Thunderitter · #13 01-06-2009, 04:04 PM

Just miss a payment and see where the set the rate! Most cards have a 'small print' rate of closer to 30%

I know there's talk of passing law to prevent this default hike but not sure if it's been put in place yet.

fitbass3p · #14 01-06-2009, 04:27 PM

Quote:

Originally Posted by Thunderitter

Just miss a payment and see where the set the rate! Most cards have a 'small print' rate of closer to 30%

I know there's talk of passing law to prevent this default hike but not sure if it's been put in place yet.

Yeah...I had a card do that once, on a balance of about $4000. Went from 6.9% to 26.9% overnight...

Needless to say, I ate ramen until I paid that one off asap. And bitched them out, of course.

Bob Clayton · #15 01-06-2009, 04:42 PM

yeah... it sucks...
i owe about 4 grand + 8 grand on a car loan

but i just got another job solely for the purpose of getting that 4 grand down.

it sucks... but you're not the only one going through it right now..

a lot of people are.

Relic · #16 01-06-2009, 05:07 PM

you're not alone buddy, I've been there. I pretty much took Deacon's approach - I took out a small loan with much lower interest and applied that towards the card, it didn't pay it completely off but got in under control. That, and then I also sold off a bunch of basses and such and ended up finally closing the card out. Once I closed the card out, I took the money that I would have been paying for the card and paid off the bank loan. It worked swimmingly and I be no jean-yus..

steve21 · #17 01-06-2009, 05:31 PM

memo to self: hold off on a credit card for as long as humanly possible

tplyons · #18 01-06-2009, 05:39 PM

Quote:

Originally Posted by steve21

memo to self: hold off on a credit card for as long as humanly possible

I wouldn't. My credit card has saved my ass more than a few times.

I wouldn't be eating right now if it weren't for my credit card.

steve21 · #19 01-06-2009, 05:47 PM

Quote:

Originally Posted by tplyons

I wouldn't. My credit card has saved my ass more than a few times.

I wouldn't be eating right now if it weren't for my credit card.

hence my "as long as possible" thing

I know I'll probably need one in the future

But I'd rather have to not worry about having a CC 'til I'm a bit older/smarter/more mature with money so I know not to use unless needed (FWIW I think grad school's a good reason)

**Eric Perry** · #20 01-06-2009, 06:00 PM

Thanks guys. For what it's worth, that card has not been touched for exactly one year... Since I registered / bought books for my last grad semester. I have no plans of using it, or any other credit card, again unless absolutely necessary. Like I said before, it's the only credit card I've ever owned.

I'm going to look into a personal bank loan to pay it off. I have great credit, so getting the loan should be no problem.