Yesterday I received one of those periodic notices from my bank credit card company. I have two credit cards; one for business and the other for personal use. The notice was for my personal credit card.
Reading the fine print of this notice, I learned that a variable delinquency rate that applies to purchases, advances and balance transfers is subject to a minimum DPR (daily periodic rate) of .07942%. A bunch of numbers to the right of the decimal point hardly means much to me until I do the math and discover that it translates to an annual percentage rate of 28.99%. Before dismissing this as a felonious commission of highway robbery by my bank acting as a mob loan shark, I found relief in knowing that it’s really a deal compared to pawn shop loans.
What’s interesting is that my bank has received about $45 billion of federal government bail-out assistance under the Trouble Asset Relief Program (TARP). Since there’s no such thing as a free lunch, I think it would be a good idea for taxpayers to charge my bank a similar interest rate on this $45 billion. That would earn taxpayers over $13 billion plus some change per year. What’s good for the goose is good for the gander.
Numbers crunching gymnastics aside, there’s something about a bank charging an annual percentage rate of 28.99% that just doesn’t seem right.
Pax Domini sit semper vobiscum
Reading the fine print of this notice, I learned that a variable delinquency rate that applies to purchases, advances and balance transfers is subject to a minimum DPR (daily periodic rate) of .07942%. A bunch of numbers to the right of the decimal point hardly means much to me until I do the math and discover that it translates to an annual percentage rate of 28.99%. Before dismissing this as a felonious commission of highway robbery by my bank acting as a mob loan shark, I found relief in knowing that it’s really a deal compared to pawn shop loans.
What’s interesting is that my bank has received about $45 billion of federal government bail-out assistance under the Trouble Asset Relief Program (TARP). Since there’s no such thing as a free lunch, I think it would be a good idea for taxpayers to charge my bank a similar interest rate on this $45 billion. That would earn taxpayers over $13 billion plus some change per year. What’s good for the goose is good for the gander.
Numbers crunching gymnastics aside, there’s something about a bank charging an annual percentage rate of 28.99% that just doesn’t seem right.
Pax Domini sit semper vobiscum
2 comments:
You're right. It just isn't right. But what can we do about it?
Charles, my solution is to pay off the card each month, using it as a convenience alternative to cash. I haven't paid interest in years. A couple of times they tried to hit me with a late fee when I missed a date, but I called and barked and they quickly reversed the charges.
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