lifehacker.com: There's a good chance you've never heard the term "Average Daily Balance" (ADB), but it affects over 75% of American adults. And that's because over 75% of American adults have at least one credit card. In essence, ADB is a formula that determines how much interest you'll pay at the end of your credit card billing cycle. If you think the interest charge is calculated by multiplying your APR by the balance on your card at the end of the month, you are wrong.
3 comments:
This article is a fantastic read for anyone going away to college for the first time, or living on their own for the first time. While a lot of the points that the author makes may seem common sense to some people, there are a lot of people out there who don't realize that by putting your $12 pizza on your credit card, that pizza could end up costing you way more than $12 by the time the interest is paid off. Before you spend your money in any fashion, you should know what you're really getting into.
This is really good advice! Going away to college is particularly difficult in a financial sense. You usually don't havem uch money and little to no income to rely on. So budgeting isn't easy. However, it's important. Even if you're still being supported by outside sources, you should start now so that you're not lost when you no longer have those sources. It can also help minimize loan debt upon graduation. Credit cards are a dangerous thing, and while it's important to build credit, college students I feel are at times frivious with the way they use them. Using ap iece of plastic can be a much different feeling than using actual cash; one that I think is the source of more problems than is realized in modern society.
This is great they should give this to everyone when they go to college and then again once they leave so that they don’t get trapped into something that they did not know. I have known about a lot of these things but I know many of my peers have no clue about it and would totally get in a trap that they could not get out of. Also there was some information that they gave that made me think in a new way about house buying and many other things. I feel that loaning companies should have a similar info packed/document when they sense that the person that they are talking to is going down a bad path but this would not be in there best interest.
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