
Usury has been around since the beginnings of civilization, and it is something that either you understand or you don’t. Simply put, usury is the charging of excessive interest on a debt. Let us say that you have the relatively small amount of $3,500 worth of credit card debt, upon which you are being charged the not-uncommon rate of 29 percent interest per year (APR), and your minimum payment is set at say $85 per month. Thanks to the nature of compound interest, it will take you 194 months to pay off the debt, meaning that, by the end of it — 16 years later — you will have paid $16,490 on the original loan. The interesting thing is that there is a magic minimum payment number that, if you go below it, the number of months that it will take to pay off the debt will become infinite. Continue reading →