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Strange Interest Charges

March 28th, 2007 at 05:19 pm

This past January we decided it was time to move my son into a "big boy" bed. We went shopping at our local big box electronic/furniture store, American TV, and found a bed, mattress and dresser. Total cost $700.69. We asked if they had any financing deals so that we could pay it off slowly without putting it on the credit card. (yeah, us.) They said they could give us 6 months interest free with equal payments. Perfect! [For those of you following along, this is the first of the debts in our debt snowball]

I didn't pay much attention to the statement when the first bill came and simply paid the minimum amount that it indicated, $132.00. NBD. I have now made 3 payments of $132 but DH is getting an unexpected reimbursement from his company and we want to pay off the balance this Friday. SO I check the bill for a payoff balance. That is when I notice that they have only been applying $117 of each payment toward the principal amount and the other $15 has been going towards a revolving balance for interest charges. But this interest charge seems to be a "threat" since the bill states right on the front "pay $XXX by 7/1/07 to avoid finance charges". Huh? So we have paid $45 towards interest charges that we don't have to pay? They sure as heck better credit that money back to us on this final payoff or send us a check for that amount. Ridiculous!

Has anyone ever heard of this before? Generally if you have 0% interest the entire amount you pay is applied to principal, not some fictitious finance charges.

Of course, since the card was opened in my DH's name only the CSRs won't talk to me. So DH is calling them today, while on a business trip, to get the whole story. Go figure.

1 Responses to “Strange Interest Charges”

  1. yummy64 Says:

    You shouldn't have to pay the interest in my opinion but they might rename it and stick it to you as an "administration charge".

    A nice reminder that when I buy furniture I want to avoid financing it with the furniture company no matter how good the deal sounds.

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