How to figure up credit card interest charges....

Discussion in 'Community Discussion' started by yg17, Jan 30, 2007.

  1. yg17 macrumors G5

    yg17

    Joined:
    Aug 1, 2004
    Location:
    St. Louis, MO
    #1
    Here's the small predicament I'm in...

    I've got 2 Macs, and am, with the exception of a dedicated DVR, Windows free. Unfortunately, it has come to a point where I need Windows for a few classes...MS Project for a Systems Analysis class, some network simulators for a network class/CCNA training and a couple other things. Of course, if I had an Intel Mac, no problem, but both my Macs are PPC. And Solitare doesn't run well in VirtualPC, I can't imagine how a network simulator would run.

    My original plan was to go for an Intel C2D mini, but I....a) Can't really wait around for Apple to get a C2D out and am not buying a CD when C2Ds are around the corner, and b) want something that I can upgrade to a small extent without voiding any warranties. The Mac Mini is Apple authorized only, the iMac isn't. And who knows when I'll want more RAM or a larger hard drive. Plus, the smaller, 5400 RPM drives in the Mini are a real turn off. I decided that if I'm going to buy an iMac, I might as well go all out and get a 24" iMac. Because I want one, mainly for the display, plus the extra power it provides...a mac pro would be overkill, but a 24" iMac would fit right in.

    So here's where I stand financially....I could pay for about half of the 24" iMac right now if I go into my savings account. Actually, I could pay for about $1900 of the iMac (figure it's $2000 with tax) from my savings, but I don't want to deplete it.

    I figured, maybe I could put a grand down in cash, and put the other grand on my credit card (with a limit high enough to buy a pair of 24" iMacs, so that's a non issue). So, after that lengthy, seemingly never ending post, my question is actually quite simple. How do credit card companies (specifically, Chase Visa) calculate finance charges? Say my interest rate is X%. It's not just price of iMac*X%, is it? Balance from previous statement*X%? Basically, what I'm just trying to get a feel for is the worst case scenario finance charges before I even think about this any more. I don't want to spend 3 grand on a 2 grand computer. But if the finance charges I'd end up paying are only a hundred bucks or so, then I'd do it.

    Like I said, I'd pay for the first grand (maybe a bit more) out of pocket. And as far as minimum payment goes? I'd probably pay about $150-200/month until June, when I'll be working at an internship and can probably pay off the remainder in paycheck or two. But I just want to figure out how much interest I'd have to pay in a worst case scenario, and how much I'd end up paying if everything goes to plan ($1,000 down, $150/mo) before I even get my hopes up.

    I was thinking of a card with a 0% APR for a year, but I worry that another credit card on my report might hurt my chances of getting a student loan for next year. My credit's pretty damn good, but I think adding a third card (yes, I have 2, no, they don't get used) might jeopardize things, I had a hard enough time these last 3 years. I'd rather pay a little bit in interest than not finish up college.

    Thanks.
     
  2. Kwyjibo macrumors 68040

    Kwyjibo

    Joined:
    Nov 5, 2002
    #2
    I had a similar situation. I bought a dell for $400. Then I complained about my order and got it down to $310. I love using a mac, but I mean for $310 it was a great deal and its a fine machine. Please consider this option rather than going into debt. I understand the pride of being pc free but it sounds like you can't afford that.

    I realize this isn't the advice your looking for and I could compute a model in excel to show your payment schedule i'm just a little bit tired now.
     
  3. Rodimus Prime macrumors G4

    Rodimus Prime

    Joined:
    Oct 9, 2006
    #3
    you walking a danagous line here in what most people get trap with a huge debt by putting stuff on a credit card they can not pay off by the end of the month (you pay off the credit card at every bill and you pay 0 interested)

    Best way to put it is they do (Balance from previous statement*X%) for you interested. So if you zero out everyone one of you statements you pay no interested.
    Those 0% APR have a catch on them. a huge catch on them so be careful. A better thing would be if you can not afford to pay it off now then you can not afford the computer right now. Other wise you doing what cause most college students to have a rather large credit card debt when they get out of school. It harsh but that is the truth. A better choice would be get a PC because with that mac you have to add at least another 100 just in software cost for dual booting.

    Just get a cheap PC to run Project. I have heard that MS Project is a great program for doing schedules and what not. I have never used it. I used Primavera before which is another great scheduling program as well.
     
  4. swiftaw macrumors 603

    swiftaw

    Joined:
    Jan 31, 2005
    Location:
    Omaha, NE, USA
    #4
    The interest rate that is quoted is the annual interest rate, but it is compounded monthly.

    Thus if the interest rate is = i, and you owe X dollars now, then if you did nothing at the end of the year you would owe X*(1+i)

    However, it is compounded monthly, so at the end of the first month you would owe at total of X*(1+i)^(1/12), at the end of the second month the total would be X*(1+i)^(2/12), etc

    For example, suppose you borrow $100 at an annual interest rate of 18% (so i = 0.18)

    After 1 month you would owe 100*(1+0.18)^(1/12) = $101.39

    Hope this helps
     
  5. killr_b macrumors 6502a

    killr_b

    Joined:
    Oct 21, 2005
    Location:
    Suckerfornia
    #5
    Ok, credit.

    Having a large amount of credit available to you is not a bad thing.
    That means having 5 cards doesn't lower your score.

    But if you have 2 cards with over 50% of the credit used, as in a balance of more than half of your available credit per card, then your score will- not necessarily go down, but it will decrease your chances of getting any additional credit lines. (Like a student loan. Although these are the easiest to get, most forgiving loans available to anyone.)

    If you have 5 cards with 20% balances on them, you will have an easier time getting more credit.

    Several more things come into play; your age, any late payments, closing credit cards is a bad thing (they think it shows you can't control yourself), if you own or rent, and if you are working while a student.

    Mostly, don't carry a high balance on any one card.
    Try to divy it up evenly.
    Don't apply for any cards after you get denied by any company for 6 months or they'll think you are desperate.

    Hope I could help a little. This subject is really tedious and confusing.
    Cheers!
     
  6. yg17 thread starter macrumors G5

    yg17

    Joined:
    Aug 1, 2004
    Location:
    St. Louis, MO
    #6
    Thanks for the info.

    Frankly, I really don't know what to do. I'd hate to run up a credit card bill, but I know I'd be able to pay it off by the end of the summer. I have a job now down at college, and am almost guaranteed an excellent paying summer internship (and of course, have my college job at the IT help desk to fall back on should I not get the internship). So I know I'd be able to pay it off. I also don't want to spend a few hundred on a cheapo Dell because it will go to waste when I eventually do buy an iMac (and it's not a matter of if, it's a matter of when, and my whole dillema is finding out when "when" is). I'm not going to run up a credit card bill, I never use the cards for anything. Netflix is charged to one, and Sirius is charged to the other, both paid off on time every month, and the only reason I do that is to show on my credit report that I am paying on time and whatnot. So yeah, it's not like I am going to graduate and have thousands of dollars in credit card debt. Student loans are another story, but that debt is obviously for a good reason. What to do...decisions suck :D
     
  7. Rodimus Prime macrumors G4

    Rodimus Prime

    Joined:
    Oct 9, 2006
    #7
    basicly if you can not pay off the bill right now you are screwing you self and it is a bad habit. Do not get the iMac and put it on the credit card bill.

    Oddly enough getting a 400 buck Dell would still work out to be cheaper after you factor in the interest rate. or at the very least you break even when you sell it.

    It is not wasting money. Also Product would easily run on the cheapo dell.

    The problem is you are willing to take on CC to get something and that is just a bad idea in every way and is a bad use of a CC. Never plan on having the money to pay it off. Something can come up that would drain it away in a heart beat.
     
  8. Abstract macrumors Penryn

    Abstract

    Joined:
    Dec 27, 2002
    Location:
    Location Location Location
    #8
    Is that true? I'm not American, but I thought that the number of cards you have DOES matter.

    For example, lets say I have 2 credit cards. One card has a $2000 limit, and the other has a $4000 limit. That's a total of $6000 in credit. Lets pretend I don't owe any money.

    Now lets say you own 5 credit cards. Pretend they all have a limit of $3000, and that you don't owe any money on any of these cards. So you technically you have $15,000 in credit. Lets pretend you don't owe any money.

    So neither of us owe any money. However, I only have the POTENTIAL to owe $6000, while you have the potential to owe $15000, which means that when you try to take out another loan, they'll look at this $15,000 in credit as potential "trouble", since you CAN owe $15000, even if you don't. I can't owe nearly as much as you.

    But anyway, I'm honestly not that knowledgeable in this area. Never had a loan, never owed much money, and so wait for someone else to chime in.
     
  9. adk macrumors 68000

    adk

    Joined:
    Nov 11, 2005
    Location:
    Stuck in the middle with you
    #9
    I think you need to accept the fact that you don't have the money for a 24" imac and buy a smaller, cheaper imac. Spending money you don't have is a dangerous endeavor.
     
  10. yg17 thread starter macrumors G5

    yg17

    Joined:
    Aug 1, 2004
    Location:
    St. Louis, MO
    #10
    Just an update....

    I'm typing this post from my new 24" iMac :D


    No, I didn't go a grand into debt, after reading the excellent advice here, I decided against it and it was a pretty dumb idea, and was going to stick to possibly a 20" iMac. But then I sold my G5, so affording the 24 incher was no problem. I've got more screen space than I know what to do with right now, but I'll find a use for it :D
     

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