Even pay one day late in some cases and they will bump that interest rate to a level that you didn't even realize was legal. You'd think that 28% on a consumer credit card would be considered "usurious" in the legal sense of exorbitant beyond reason. But, the laws do a better job of protecting people with money than people with debt in many cases.
Unless you've ruined your credit, there's usually ways of changing accounts around to get lower rates.
Years ago - I was older than you are now - I got into serious credit trouble. Here's how it went down:
You owe some money, but think you're okay. You get offers in the mail for more credit every day. One day you notice that you've got this great offer where you can get more credit at a lower rate. You transfer your balances, but leave the account that you cleaned up open. You spend a little more money that you don't have here and there, on both accounts. Pretty soon you take out another new account at an even better rate, but you don't close either of the other accounts. Now, you have a shitload of available credit. You have a couple of small emergencies, or you spend too much on gifts at Christmas.
Now, you're paying out so much per month just to keep up with interest, that you aren't paying anything off. Maybe you have a bump in the road at work, and you make a little less money. You begin to pay your bills a little slower than you used to. You miss a payment or you're late. Your interest rates skyrocket, and now you can't even make the "minimum" payment comfortably.
Tons of people get into this situation. The consumer credit industry - at least the segment of it that specializes in sending out those low rate/high penalty offers doesn't care. They automatically assume that they will eventually write off about 2% of what they lend. They use these predatory practices to enable them to collect interest at rates like 28% on a portion of what they lend, and they write off a certain amount of what is owed to them each year.
Of course, they'd love it if they could just keep collecting the high rates, but it's like a cycle of business that is pretty much statistically inevitable, and they know how to work it to maximize their return and milk each customer for all they are worth.
Your goal as a credit consumer should be to eventually get to where you can use your credit cards ONLY for purchases you can pay off before interest comes due. That's a really hard goal for most people, but it is possible.
You should not be carrying debt over from month to month except for the debts on which the interest is tax deductible, and which is capped at a maximum rate - other than maybe car payments. I'm not saying that everyone should be doing that right now... I am saying it is a good goal to have.
Very few people can continue to carry over a significant amount of credit card debt each month without eventually sliding deeper into it. When you start using one source of credit to "temporarily" pay down the other, it's a warning sign. At first it seems like you can "float" debt by constantly shifting the debt from one source to another, and by doing so quickly enough that you are always paying it before the interest is due.
Example: if you had 4 credit cards, each of which allows you 28 days at no interest, it seems like if you constantly rotated the debt among them at 15 day intervals, you'd never owe interest.
But, it never works out that way. It's real easy to let the debt build up slowly, and to then make little exceptions for stuff that pops up. Car repairs. A wedding gift. That "really good deal that you can't pass up." There are so many things that come up that we think we shouldn't pass up, or that "we deserve," or that "well, we can make this exception and make up for it in the near future by scrimping a little."
Then, one day, you find that you are at the end of the rope. You can't scrimp any more, and the interest each month is all you can afford.
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Originally Posted by Frank_White
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) to eat breakfast at home, and to take my lunch in. I'm so used to eating out that it has been hard for me to change, but I have done it. Smaller portions too. Breakfast now consists of one egg sandwich or oatmeal or cereal. Lunch has been a little bit trickier, but I have been bringing it in with me every other day at least, and getting a 4 buck salad on the days I don't bring it. 
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