My wife and I haven’t run a balance on a card in years. We have a handful of cards we use for convenience and to get points and airline miles. We get our statements emailed to us, then pay them off in full online each month.
Last month, my wife realized we didn’t get the statement for the card we use for personal expenses. When he checked the account, she realized it was one day past the due date, so she immediately paid it. We discovered there would be a late fee and some interest due. The balance was around $3,500, so we figured the interest would be maybe a few bucks, right? Wrong!
A week later we got an email that floored us. It notified us of a $15 late fee, PLUS a $162.00 interest charge for being one day late! That’s 4.63% interest per day – 1,692% interest per year!
A whole page of fine print on the statement tried to explain all the “gotchas.” But it’s a fact that banks and finance companies are gonna get you one way or another. Why? Because they can.
You can lead a cash only lifestyle that will help you spend less and not waste money on interest, fees, and unnecessary purchases. Going cash only is not hard to do, you just have to commit to being a little different than the average consumer.
It is probably no surprise to my readers on this blog that I absolutely hate credit cards and debt. They are a burden that you don’t need in order to succeed in life, and they will only serve to drag you down financially.
So because of what I’ve learned about how credit cards and debt really work, I’m convinced that the absolute best way to use a credit card is to never use one at all.