Return to the Household Finances Forum | Post a Follow-Up

How to arrange guaranteed income reduction next year

Posted by joyfulguy (My Page) on
Thu, Feb 22, 07 at 16:57

Most of us hope for an increase in our paycheque next year - which sometimes happens, but in recent years expecially ... sometimes it doesn't.

There's an easy way to ensure that you'll have less income to use for your family's operation, though.

Suppose you've had a "credit" card (really a "debt" card) and up until now you've paid off the balance outstanding every month by the due date.

An easy way to guarantee a reduction in your income available for operations next year is to buy a lot of stuff over a short term, e.g. Christmas, using the card, with such a large amount outstanding that you can't pay it off in full every month.

That'll mean that they start charging interest on the unpaid balance ... and I think that once that liability begins, the date at which the interest starts to accrue is on the date that you buy the goods. If you use it for cash advances, it always accrues from the date that you receive the money.

If you're using a regular credit card, their regular rates are about 15 - 18% annual rate.

If you're using a store-issued card (have you noticed how enthuiastic they are about issuing them?) their regular rates usually run 25 - 28% annual level.

That means that, as of the coming months, part of your hard-earned income will be going to pay those high rates of interest.

As each dollar only works once - that means that there'll be fewer left in your pocket to use to pay other bills and buy other stuff.

That is - effectively, you arranged a pay cut for yourself.


Same result if you carry balances on your card currently, and increase them to a higher level.

If you don't boss your dollars - they'll boss you!

ole joyful

Follow-Up Postings:

RE: How to arrange guaranteed income reduction next year

I was shocked to read that policy change in my last master card statement. I am all for free enterprise, but it's not as if those companies don't make enough from their virtual monopoly.

RE: How to arrange guaranteed income reduction next year

"Free enterprise" is when there's a more or less level playing field.

They claim that competition keeps the market "fair".

And they love competition among their suppliers - the more, the better, for it enables them to obtain very competitive rates on their inputs.

And they love it among their customers, for it means that the customers can't very well gang up on them and demand "fair" prices.

But - they hate it on their own level - it reduces their power.

Most corporations dislike that - they prefer more or less "private" enterprise.

They'll do whatever they need to in order to get rid of competition on their own level.

Buy the competitor out - especially when he's having troubles and is willing to accept a really low price for his business.

Or squeeze him out of the market by undercutting prices till he's pushed out of business - large dairies did that to the smaller ones, years ago ... as happened in many other business types, as the big guys ate the little guys.

Do you know any major type of business in Canada where there are more than half a dozen players that "serve" 80% or more of the market? And when a few players supply almost all of the market like that ... pricing and other rules become rather artificial!

We've had various government studies to evaluate whether there is competition in the price of gasoline ... and they *always* report that there is - that the market is in good shape!

And there may be half a dozen people (of about 350,000) in London and area that believe those reports!

ole joyful

 o Post a Follow-Up

Please Note: Only registered members are able to post messages to this forum.

    If you are a member, please log in.

    If you aren't yet a member, join now!

Return to the Household Finances Forum

Information about Posting

  • You must be logged in to post a message. Once you are logged in, a posting window will appear at the bottom of the messages. If you are not a member, please register for an account.
  • Please review our Rules of Play before posting.
  • Posting is a two-step process. Once you have composed your message, you will be taken to the preview page. You will then have a chance to review your post, make changes and upload photos.
  • After posting your message, you may need to refresh the forum page in order to see it.
  • Before posting copyrighted material, please read about Copyright and Fair Use.
  • We have a strict no-advertising policy!
  • If you would like to practice posting or uploading photos, please visit our Test forum.
  • If you need assistance, please Contact Us and we will be happy to help.

Learn more about in-text links on this page here