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How credit card companies make money

I just downloaded my latest credit card statement, and I knew it was going to be big because it’s been a particularly extravagant month.

I’ve booked two Vegas trips for myself and one for my sister (I’m sure you’ll hear more about this), plus enough first class train tickets to requalify for Virgin Traveller.  Apparently I’ve been to Cheltenham five times this week, who knew?

There’s also all my new office furniture.  My desk is up, and it’s all the right colour, and it turned out to be a marvel of engineering.  The Hoover Dam of desks.  The lady in Ikea said it would never work, that it’s just not meant to go that big.  I’ve proved her wrong just by using two steel tubes and one extra leg.  The over/under on it collapsing is three weeks.

Then there’s all the other random crap that usually goes on there, which this month included car insurance renewal and, obviously, Spice Girls tickets.

New Balance:   £4,983.46
Minimum Payment:   £9.20

Not forgetting the really important bit:

BMI Diamond Club Miles earned: 7,313.04

I really wouldn’t mind if they rounded down the point zero four miles, that won’t get me very far.

So let me get this straight.  Even if there was no interest on this card I would be paying it off at just over nine quid a month, which would be 542 monthly installments - a mere 45 years to clear the balance.

Given that if you pay your credit card automatically by direct debit you have just two options - full balance or minimum payment – this special rate (the card terms say the minimum payment should be 3% of the balance - nearly £150 in this case) has to be a crafty angle they’re shooting to try to rack up a lifetime of interest.  Or at least a couple more months until you realise what they’re up to.

Can anyone lend me five grand?