Interest charged to credit card purchases is so annoying and makes it all that much harder to pay down the debt.

[traveller]

All of us that use a credit card (Discover, Visa, etc) have experienced it in one way or another when using the credit card for a vacation, to buy groceries, and other things. It is called interest. The dreaded, horrible interest that is charged monthly by the credit card companies and raises the balance right back up there. To put it in a nutshell, interest is like a tax imposed on borrowed money such as a mortgage or a credit card. And interest is charged based on how high the balance is, not by how much you spent within the past month. And it makes it really hard to even impossible to pay the balance down over time.

For example, let's say you're paying the credit card company $300 a month and the interest is $250 a month. You might think you're paying it down a bunch by paying them $300 a month. But then the interest (tax) charge hits and your balance is back up by $250.

You're actually paying down the balance by only $50 with each $300 monthly payment.

And sometimes interest rates get raised or the balance gets so high to where the interest actually outpaces or outruns your ability to pay it down. In that case, you could completely stop using that credit card and try to pay the balance down, but the interest (tax) charges actually raise the balance up every month, resulting in runaway debt and eventual bankruptcy.

[MrMan]

All of us that use a credit card (Discover, Visa, etc) have experienced it in one way or another when using the credit card for a vacation, to buy groceries, and other things. It is called interest. The dreaded, horrible interest that is charged monthly by the credit card companies and raises the balance right back up there. To put it in a nutshell, interest is like a tax imposed on borrowed money such as a mortgage or a credit card. And interest is charged based on how high the balance is, not by how much you spent within the past month. And it makes it really hard to even impossible to pay the balance down over time.

For example, let's say you're paying the credit card company $300 a month and the interest is $250 a month. You might think you're paying it down a bunch by paying them $300 a month. But then the interest (tax) charge hits and your balance is back up by $250.

You're actually paying down the balance by only $50 with each $300 monthly payment.

And sometimes interest rates get raised or the balance gets so high to where the interest actually outpaces or outruns your ability to pay it down. In that case, you could completely stop using that credit card and try to pay the balance down, but the interest (tax) charges actually raise the balance up every month, resulting in runaway debt and eventual bankruptcy.

I got into the trap of having to borrow money to survive while unemployed. I was thankful to get a job that actually dumped a lot of money on my family, overseas, soon after I started, and we were able to pay off the debt.

I already knew this lesson and had lived by it before this time of crisis-- always pay credit cards BEFORE interest kicks in, at the end of the month.

If you have an income to report, Discover had a deal for new customers way back when-- no interest and no fees for so many months-- maybe 9 months, a year, or 18 months. There is a card, I think a 'blue' card from American Express that had a deal like that. Sometimes they will do interest fee, but with a 4% fee to transfer the balance. I hated to take the hit and do a fee, but I did that once when I got underwater with credit cards, again, an unexpected period of unemployment.

My numbers were from years back before inflation and high interest rates, so I'm guessing zero interest got replaced with 4% or 5%. But the flat fee to transfer a balance over to a new card or an existing card that sends you a promotion is probably better since it does not accumulate, but you would have to project when you would pay and do the math. Some cards will send you checks so you don't literally have to use it to pay off the balance of another card. You can just put it in the bank and pay whatever you want with it. You have to make minimum payments at least during the zero interest period.

Unless I get super busy and miss a payment or it doesn't go through, normally I don't pay interest. And if you get charged a late fee, many cards will waive it once a year or so if you call in and ask.

[milevaa]

I completely understand your frustration with credit card interest rates—it can feel like you're constantly swimming against the tide when trying to pay down debt. One tip that might help is to look into balance transfer options, where you can transfer your existing credit card balance to a new card with a lower interest rate, or even a 0% introductory rate for a certain period. This can give you some breathing room to make larger payments towards your debt without accruing as much interest. Additionally, reaching out to your credit card company to see if they offer any hardship programs or options for lowering your interest rate could be beneficial. As for AllianceBernstein, they might have financial advisors who can offer guidance on managing debt and creating a plan to pay it down more effectively. It could be worth exploring their services here https://www.pissedconsumer.com/company/ ... rvice.html to see if they can provide assistance tailored to your specific situation.

[yick]

Credit is a trap that you can't really escape from and then you get to depend on it - if you have a family then I can see why it is easy to fall into it but if you're single with no kids, why are you doing it? You're a fool! Buy what you can afford and if you can't afford it, save up for it!

[Yohan]

If you buy something using your creditcard do this only if you are sure to be able to pay for the open balance the coming month. Otherwise you will be hit with very high interests, usually 15 % to 18 % - if you feel unsure if you can pay, better don't use your creditcard at all.

Some people cover creditcard debts by applying for another creditcard and use three or four creditcards, but the financial breakdown is only postponed, but cannot be avoided in such a case.

Creditcards are often misguiding you to pay for something what you like but what you do not really need so urgently at this moment. Think about it.

If you cannot control your spending and slip into debts, better do not use creditcards at all, cancel them.

[publicduende]

If you buy something using your creditcard do this only if you are sure to be able to pay for the open balance the coming month. Otherwise you will be hit with very high interests, usually 15 % to 18 % - if you feel unsure if you can pay, better don't use your creditcard at all.

Some people cover creditcard debts by applying for another creditcard and use three or four creditcards, but the financial breakdown is only postponed, but cannot be avoided in such a case.

Creditcards are often misguiding you to pay for something what you like but what you do not really need so urgently at this moment. Think about it.

If you cannot control your spending and slip into debts, better do not use creditcards at all, cancel them.

Yeah, the game with credit card is to be able to pay the full balance every month. If you do that, and you get all the perks of owning a credit card, like improved credit score (paradoxically, someone who doesn't need a credit card has a lower credit score than one who needs a credit card), air miles and freebies, etc.

The last time I had a credit card was more than 10 years, when I was still in London. Never had one since and my life continues mortgage-free and debt-free.