No Interest My Ass!

After years of refusing to have credit cards, I have learned that having one and paying it off monthly keeps me from screwing up my checkbook and builds my credit.
So since I have good credit now, I have a fancy new Chase Visa card. I have used it to pay for our honeymoon, which means I’ll be carrying a balance.
While I was looking at the terms, I noticed that they have a “Pay over Time” feature, “with no interest.” Of course, one must always read the fine print.
I am financing $448.00. My credit card has an interest rate of 27.99% (which is why I try to not carry a balance). If I use the “Pay over time” feature, according to the document below, I’ll be paying $80.78 per month for six months. The fine print reminds us that this includes a MONTHLY fee of $6.11 with no interest.

I noticed that the fee changed with the amount being financed.

Math nerd that I am, I couldn’t resist the opportunity to make a spreadsheet.
If I pay over time, that would be six payments of $80.78, for a total of $484.68.

If I don’t pay over time and just allow the balance to accrue interest every month but I pay the same amount for six months, I still pay it off in six months, but it costs me $485.31. That means that over six months, I would save a whopping $0.63 by doing the “pay over time.”
According to Bankrate.com, “Interest is the price you pay to borrow money.” So this is absolutely interest. Especially if you figure out how much you’d be paying on the other options!
Of course, anything is better than minimum payments. If I made a minimum payment of $25/mo, it would take me 23 months, almost two years, to pay off $448. I’ll have paid $561.70.
The moral of this story, friends, is if you use credit cards, pay them off as quickly as you can. They exist to make someone rich, and it ain’t us!
This has been a friendly ALGEBRA IN REAL LIFE message.