Quote:
Originally Posted by (JD)
One big reason is that when you make a payment, rather than paying the entire balance, the payment is applied to INTEREST and not the charges.
Another thing to remember is that even if you make a payment during the month, they apply interest to the full amount owed before the payment during the month. (Highest owed at anytime during the month.)
Be sure to call again and ask another and then ASK for an adjustment or allowance. Also, while you're on the phone, verify what you APR is and ask for it to be reduced. (They always do this, but if you don't ask, they charge the full allowed by the government.)
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When you make a payment on a credit card balance, they apply the payment toward reducing the total balance. This statement above that they apply the payment only toward reducing interest owed is not true. Your balance isn't divied up into balance due to interest charges and balance owed due to purchases. You have one consolidated balance. It is composed of accrued interest charges and purchases (and possibly cash advances.) It is one amount.
Of course, if you make a payment that is less than the interest charge for the month, then it would make sense to think of that payment as doing nothing other than paying on the interest. That is called paying just to "service the debt." Merely "servicing the debt" means you are not reducing your debt, but just keeping up the interest payments to allow you to not have to begin really paying off the debt.
You can ask a creditor to reduce the interest rate they are charging you. They usually won't. They may, if they think you have the ability to borrow enough from someone else to totally pay them off. The statement above that "they always do this" is not true.