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The Watercooler
Does anyone else feel the economy won't get better?
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<blockquote data-quote="susiestar" data-source="post: 504271" data-attributes="member: 1233"><p>Janet, the whole credit thing goes like this. If you get a loan for a car with a big down payment and a note for x months, the credit co figures they will earn X amt. If you pay it early, they make less because each payment goes first to interest and then anything left to the principal. The bigger each payment it, the lower your principal and the lower your interest payment the next time. So the company makes X-dollars on your loan. Now they make their $$ but honestly? They don't like people who pay off early. So paying off early means it is harder to get credit next time, which is TOTALLY counter-intuitive because they don't have to hire collectors or have people call you about your payments. This is also a reason that many loans charge a penalty for early repayment of the loan and it can be substantial. Same for credit cards. The fewer you have, the fewer that you actually have a balance on, the smaller the pile of cash the credit co makes from you. That is why it can take a decade to pay off a credit card if you only make minimum payments. IF you can actually pay it off in a decade.</p></blockquote><p></p>
[QUOTE="susiestar, post: 504271, member: 1233"] Janet, the whole credit thing goes like this. If you get a loan for a car with a big down payment and a note for x months, the credit co figures they will earn X amt. If you pay it early, they make less because each payment goes first to interest and then anything left to the principal. The bigger each payment it, the lower your principal and the lower your interest payment the next time. So the company makes X-dollars on your loan. Now they make their $$ but honestly? They don't like people who pay off early. So paying off early means it is harder to get credit next time, which is TOTALLY counter-intuitive because they don't have to hire collectors or have people call you about your payments. This is also a reason that many loans charge a penalty for early repayment of the loan and it can be substantial. Same for credit cards. The fewer you have, the fewer that you actually have a balance on, the smaller the pile of cash the credit co makes from you. That is why it can take a decade to pay off a credit card if you only make minimum payments. IF you can actually pay it off in a decade. [/QUOTE]
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Does anyone else feel the economy won't get better?
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