July 28, 2009

The Wonderful World of Compounding Interest

I make no claims to be a mathematician, or an accountant. I do, however, make the claim that I read the inserts in my statements each month that detail privacy policies and fee schedules. I also read the instruction manuals that come with things that we purchase...

That being said, I will now explain why that statement is important.

We recently purchased a camper trailer. To do so, we did a "cash advance" from a credit card we have through our credit union to our checking account, because they wouldn't let us use the special checks that you get every so often in the mail that promise 0% interest and the like. We were charged $2 to issue "an official check" because they wouldn't just give me the cash, and they don't do true cashiers' checks.

We did it this way because the seller wanted certified funds, which I would have done also based on the amount of money we were giving him. We also did it this way because we were waiting on a check from selling some of BB's stocks. They were sold, the money was on its way, but it wouldn't be here in time for us to use those funds to get said check by date of purchase...SOOOOO...we got the check in the mail from the broker, deposited it into our checking account, as we ALWAYS do when we sell stocks. They put a 14 business day hold on it to insure that it was a viable check. Um...hello???? The broker BB's employer uses is not some unknown broker...they have never held a check before. EVER. SO...for 3 business weeks, we were accruing interest on the money we had moved because their policy "clearly stated" the rules and procedures...it wasn't a ton...but it was enough that it made me a bit cranky.

SO...this morning, I pulled all the paperwork that we had received with our new V.isa account. I scoured that document and all subsequent documents, and NOWHERE does it state that we would be charged interest on a cash advance from day 1 of the advance. NOWHERE does it state in the banks online policies and procedures that there are interest charges paid from day 1 if the account is paid in full before the due date.

I just spent 2 hours on the phone with a customer service representative with said documents in front of me and she argued with me that "it had always been their policy" to accrue interest from the first day.

I actually just read the paperwork on our other credit accounts also...NONE OF THEM charge interest prior to the first billing cycle ending, if the account is paid in full during that time. I actually called another lender to whom we owe money, and you know what? they said that if we did a cash advance, and paid it back during the first billing period, there would be no interest or finance charges associated with said transaction...

Needless to say, I was very frustrated, even though, in the end I did get the interest reversed, and all charges and fees reversed as well. We now have a $2 credit on that account because our total payments to the account included the original fee.

All this is to say - make sure you know your stuff before you start making an issue of something!

Next call is to our new phone service provider to pay their crazy pro-rated bill that is 3 times what our contract stated our monthly payment was to be...grrrrrr...

1 comment:

Ang said...

ugh hate when they screw with you.