Why are banks allowed to charge interest if you pay on time?

Why are banks allowed to charge intrest if you are getting your min. payments on time? I thought intrest was only put on if you are late?

Answer #1

k thanks, but I was watching this guy on tv, the one who wrote the book about drugs that the goverment doesnt want you to know about and another one on how to lose weight, well he wrote a book on finace stuff and he was sayin somethin about the banks dont have a right to charge that much.

Answer #2

A bank is a business and a business must make money in order to survive. When you borrow money from a bank (or use a credit card) you agree to pay back the money plus interest. The interest is how the bank makes money. Most credit cards offer a grace period, normally 30 days, where no interest is charged but only if you pay in full. If you are late on a payment then a bank will normally charge you a late fee. This late fee is not interest but a penalty for not paying when you were supposed to.

People that make minimum payments are how the banks make most of their money because your debt takes so long to pay off. If you can afford to make more than the minimum payments you will pay off your debt much quicker and pay much less interest. If you are charging more than you can pay in a month then you are headed for trouble.

Answer #3

Do you think bank’s just keep your money safe to be nice. Stupid sh1t.

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