I've studied credit card scams and abuses in the abstract. I wanted to do an experiment to see how shady credit card company "accounting" really is. My cynical self was astounded.
I'll tell you what I did, and then show you what happened. I'm sure some shyster can explain why this "accounting" was the product of "free choice" or "freedom of contract." It's a shyster I won't listen to, as anyone who would defend this practice is unworthy of attention.
I always pay my balance off each month. This month, I decided to carry a small balance to see what finance charge I would incur.
My previous balance was $979.90. Payment Activity (how much I paid) was $704.90. Thus, should have had an unpaid credit card balance of $275 that I would pay interest on. My annual percentage rate is 13.4%.
Question: How much should have interest payment have been? Answer: When dealing with credit card companies, forget what you think you know about math.
I was charged $13.63 in finance charges? How? My APR is 13.24%.
Is there some hidden usurious rate?
The answer is even more amazing.
Even though I paid off all but $275 of my balance, I was required to pay interest on an "average daily balance" of $1,211.03. So American Express calculated my 13.4% APR based on money I did not actually owe them. Remember, I paid them back all but $275.
How in that legal?
I'm a smart guy. I'm a jaded guy. I don't believe in tooth fairies and gum drops. I thought I had a pretty good idea how corrupt credit card companies are. Credit card companies like American Express are so corrupt and scummy that even I couldn't foresee what they would do.
How then can anyone argue that people with IQs several standard deviations less than mine "freely" enters into contracts with credit card companies?
There can be no principled defense of credit card company's "accounting" methods.
Henceforth, I'm going to use credit cards as a litmus test. Anyone who mentions "freedom of contract" within the context of credit cards has such an unrealistic understanding of how credit card companies opreate that their opinions are per se invalid.
P.S. As a taxpayer, I bailed out American Express. I bailed out American Express so that they and other banks can rob me. As Don King would say, "Only in America!"