An overdue credit card will not only affect your personal credit score, but also charge interest, and the interest rate is very high. The daily interest rate is 5/10,000 and the annualized interest rate is 18.25. This is already very high, right?
But if that’s all, that’s all. The problem is that the way it calculates interest is even scarier.
The interest calculation method of credit cards is not only the legendary "compound interest", but also full penalty interest, one cent per cent interest.
Einstein said compound interest is the ninth wonder of the world.
This sentence is very comfortable if used in investment. The annual compound rate of return is 18.25. After 30 years of compound interest, 10,000 yuan becomes 1.528 million yuan, an increase of nearly 153 times.
The reason why stock god Buffett has a net worth of hundreds of billions today is because he has been able to maintain an annualized compound rate of return of 21.97 for many years.
Credit cards can use compound interest (compound interest) to calculate interest, which will be unfriendly to high-end consumers who need to repay interest.
For example, if the interest amount this month is 10,000 yuan and the interest generated is 152 yuan, then the interest amount next month will be 10,152 yuan.
How did Buffett become a global rich man by relying on compound interest? How do people who paid interest on their credit cards become "negative"?
Those who pay credit card interest sacrifice their future.
What further pushes up credit card interest is the "full penalty interest."
This means that as long as the full amount is not repaid, interest will be calculated on the "full amount owed", regardless of the repaid portion or the unpaid portion.
For example, you repay 10,000 yuan in full this month. On the day of repayment, due to poor fund circulation, only 2,000 yuan was repaid.
In principle, the bank still owes 8,000, and the interest amount should also be based on this. In fact, the bank still pays full interest on the repayment of 10,000 yuan.
In order to alleviate the pressure of repayment, credit cards have launched "installment repayment".
This function seems to make us pay less every time, but there is interest in each period. Isn’t it just a “full penalty interest”?
What further pushes up credit card interest rates is the calculation of interest one by one.
This means that as long as the full amount is not repaid, interest will be calculated separately for each purchase, and interest will be calculated from the second day of consumption (the date of entry).
The interest accrual date is divided into two parts. The interest on the repaid portion is from the entry date to the repayment date; the unpaid portion is the number of days from the posting date to the next repayment.
To emphasize this again: interest is calculated from the date of entry.
Let’s use the above interest calculation method to see how Zhang San pays interest.
Zhang’s accounting date is the 15th of each month, the repayment date is the 2nd of each month, and the daily interest rate of his credit card is 0.05%.
Last year my wife asked Zhang San to make new year’s goods. 3,000 yuan on January 16, 2,000 yuan on January 23, and 1,500 yuan on January 27.
By the accounting day of February 15, Zhang Sanyi spent 6,500 yuan. If Zhang San repays the loan in full on March 2, there will be no interest.
(1) If Zhang San repays 2,000 yuan on March 2, the remaining 4,500 yuan will be repaid on March 13.
The 2,000 yuan has been repaid from the first purchase on January 16 to the repayment date on March 2, and the number of interest accrual days is ***47 days.
The interest generated by repaying 2,000 yuan = 2000*47*0.05=47 yuan.
RMB 2,000 has been repaid, with a down payment of RMB 3,000 and the remaining RMB 1,000 to be returned on March 13.
The interest accrual period for this money is from January 16th to March 13th, which is 58 days.
Then, the interest on the first unpaid 1,000 yuan = 1,000*58*0.05=29 yuan.
The interest accrual date for the second consumption of 2,000 yuan is from January 23 to March 13, ***50 days.
The interest = 2000*50*0.05=50 yuan.
The interest accrual date for the third purchase of 1,500 yuan is from January 27 to March 13, which is 46 days.
The interest = 1500*46*0.05=34.5 yuan.
Zhang’s total interest = 47 29 50 34.5 = 160.5 yuan.
The interest of 10.5 yuan doesn’t seem like much, right? Let's calculate the interest on Zhang San's debt and we will know how much it is.
Zhang originally owed the bank 6,500 yuan, but later repaid 2,000 yuan and still owed the bank 4,500 yuan. The number of days overdue is 11 days, and the interest is 160.5 yuan.
Then, Zhang San’s annual interest rate = 160.5/4500/11*365=118.3.
Isn’t this interest rate level jaw-dropping?
(2) If Zhang San repaid 4,000 yuan on March 2, the interest accrual period for the reimbursement of 1,000 yuan is from January 23 to March. 2nd, ***39 days; the remaining unpaid 1,000 yuan is from January 23 to March 13, ***50 days.
Zhang’s interest = 3000 * 47 * 0.05 (4000-3000) * 39 * 0.05 (2000-1000) * 50 * 0.05 1500 * 46 * 0.05 = 149.5 yuan.
At this time, Zhang San’s annual interest rate=149.5/2500/11*365=198.4.
Isn’t it incredible that the borrowing interest rate has nearly doubled? But it is what it is.
As long as the payment is not made in full, regardless of whether it is overdue, "minimum payment" or installment payment, interest will be paid. There are also fees such as liquidated damages and handling fees.
Those who pay interest on their credit cards sacrifice their future. Related Q&A: What is the typical interest rate on credit cards?
Generally, the daily interest rate for credit card interest is 0.05%, which means that the monthly interest on 10,000 yuan is about 150 yuan. 1. Credit cards are generally repaid on time and there is no interest for full repayment. In addition, overdraft cash withdrawals also charge a certain amount of interest and handling fees. The interest is calculated on a daily basis, which is also very high. Interest and handling fees are calculated from the date of cash withdrawal. Charged at 0.5 (minimum 2 yuan/transaction). You can control your credit card consumption and repay it on time every month. The credit card will always be interest-free. You only need to refund the bank amount you spent. If you overdue the payment without interest or fail to repay in full, the bank will charge interest. 2. Credit card interest is calculated from the date of purchase. Interest is charged at 5 per day and compounded monthly. That is to say, if the interest is not paid this month, interest will also accumulate next month. In addition to interest, using a credit card and not repaying on time will also incur some other fees, such as late payment fees, card holding fees, etc. People should pay attention to the cost standards of credit cards when using them. Credit cards are generally repaid on time, and full repayment is interest-free. You can control your credit card consumption and repay it on time every month. The credit card can always be interest-free. Only the amount you consumed will be refunded to the bank without interest. If you have capital turnover needs, it is recommended that you use Youqianhua. Youqianhua is a credit service brand under Duxiaoman Financial (original name: Baidu Youqianhua, renamed "Youqianhua" in June 2018). It is a big and reliable brand. The interest rates are low and trustworthy. Youqianhua - Manyidai, the maximum loan amount is 200,000, and the daily interest rate is as low as 0.02. I have learned about many small loan companies. Generally speaking, Baidu Youqianhua is the platform with the highest approval rate. The credit limit is the highest. I was given a credit limit of 9.5W for nothing, and my colleague directly extended a credit limit of 18W.
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