Bit of a flurry of posts this morning I think, as I couldn't be arsed (read: was playing Civ3 almost non-stop all w/end) to post on my blog over the bank-holiday week-end.
While I was sorting out the overdraft issue I also took the opportunity to cancel this insurance thing I have on the credit card. I've had it for years and never really thought about it. The idea is if you can't pay for some reason, then this thing covers the payments.
Well, I've not really used the card in ages and was intending to slowly pay if off and eventually get rid of it (I'm lethal with credit card spending - hence the unwatched DVD mountain I've accumulated). As such, the effects of this insurance have become apparent to me. Here's an example of what happens, using some easy numbers:
Get the statement, see that the minimum payment is £50.00
Pay the minimum payment - balance goes down £50.00
Interest is applied - balance goes up £30.00
Insurance is added - balance goes up £20.00
So, interest + insurance = minimum payment. In other words, the balance never changes!
I'm not sure if that's ironic, or just plain annoying.
It's my own fault for not really thinking about it before, but this is what the bank's rely on - people not thinking things through properly.
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