NFCU LOC not reporting on CRA's strategy

[elbori357]

Ok I called and was explain the following:
If I use 3000 of my loc at 13.99% it gets divided by 30 days of the month to calculate a daily balance and the interest is then applied to the daily average balance which will be 100 dollars. Total interest paid will be $13.99 for that month if I were to PIF at the end of the month. Does this sounds about correct?

[Creditaddict]

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@elbori357 wrote:
Ok I called and was explain the following:
If I use 3000 of my loc at 13.99% it gets divided by 30 days of the month to calculate a daily balance and the interest is then applied to the daily average balance which will be 100 dollars. Total interest paid will be $13.99 for that month if I were to PIF at the end of the month. Does this sounds about correct?

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Umm no!

[credit-hunter]

that would be 167.88% per year can't be?

[user5387]

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@elbori357 wrote:
Ok I called and was explain the following:
If I use 3000 of my loc at 13.99% it gets divided by 30 days of the month to calculate a daily balance and the interest is then applied to the daily average balance which will be 100 dollars. Total interest paid will be $13.99 for that month if I were to PIF at the end of the month. Does this sounds about correct?

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I expect what they and you are trying to say is that they will take the daily balances over a month, add them together, divide by 30, and then apply an annual interest rate of 13.99% to the average.

If you use $3K for a month, the average daily balance is $3K, and the total interest would be approximately:

   3000 * 0.1399 / 12 = 34.97

If the interest is compounded daily or continuously, this increases the effective rate, but not dramatically.

[Pupeitmeister]

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@user5387 wrote:

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@elbori357 wrote:
Ok I called and was explain the following:
If I use 3000 of my loc at 13.99% it gets divided by 30 days of the month to calculate a daily balance and the interest is then applied to the daily average balance which will be 100 dollars. Total interest paid will be $13.99 for that month if I were to PIF at the end of the month. Does this sounds about correct?

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I expect what they and you are trying to say is that they will take the daily balances over a month, add them together, divide by 30, and then apply an annual interest rate of 13.99% to the average.

If you use $3K for a month, the average daily balance is $3K, and the total interest would be approximately:

   3000 * 0.1399 / 12 = 34.97

If the interest is compounded daily or continuously, this increases the effective rate, but not dramatically.

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But that would be the total for a 30 day month worth of interest... so you would further break that down:

34.97/30 = 1.16 per day... so if you borrowed the 3k on the 20th of the month, and only kept it for 10 days, then PIF the full 3k, it would only cost you somewhere around 12 bucks.  the finite math can get tricky, but its not too bad once you figure the formulas.

[elbori357]

Man I will call tomorrow and ask to speak to a banker instead of a customer support rep. I really want to understand this. Thank you for your help guys. Will report back tomorrow.

[user5387]

If the calculation is done from scratch, then we have:

   3000 * 0.1399 / 365 = 1.15 per day

Paying this sort of interest for a few days is not a big deal.

[Anonymous]

NFCU LOC took about 1.5 months to report on EX & EQ and almost 2 months on TU, I opened the LOC in late January.

[elbori357]

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@user5387 wrote:

If the calculation is done from scratch, then we have:

   3000 * 0.1399 / 365 = 1.15 per day

Paying this sort of interest for a few days is not a big deal.

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After speaking with a more knowledgeable rep at NFCU the above is entirely correct. Based on the 3k amount, the interest is 1.15 per day. Now, I go back to should I use a small amount to trigger them to report to CRA's ?

Thank you!!!!

[credit-hunter]

the CLOC/NAVCHEK will report with out TRIGGERING it no need to do that.