How banks scoff your money

Date:         19 April 2017

By:             Frank Gue B.Sc., MBA, P.Eng.,

2252 Joyce St., Burlington, ON L7R 2B5

905 634 9538    <frank.gue@cogeco.ca>

For:            Producers, Metro Morning, CBC Radio 1

cc:              Letters, TheSpec, Hamilton

Re:             Your series re Bank processes –  my file TD Time to Pay

Dear Producers:

My Rebate Reward statement (TD Bank credit card) says in part in the Bank’s own words, (rearranged to make sense in terms of a householder’s budget):

New balance:                      $ 3,444.43

Minimum payment:            $      10.00

The estimated time 

to pay your new balance

if you pay only the 

minimum payment

each month is:                    41 years and 3 month(s)

The statement in bold italics above is not true.  In fact, the time to pay $3444.43 with the bank’s suggested $10.00 monthly would accumulate forever at the stated interest rate of 19.99% since the monthly interest far exceeds the bank’s $10.00/month minimum payment.

Further, since 53% of adult Canadians are innumerate according to StatsCan, a very large number of Visa credit card holders are unaware of what that 19.99% interest rate is doing to them.  This public ignorance is very helpful to the banks.

If you were to ask Mr. Frank Psoras, VP Credit Cards, TD Canada Trust, POB 3000, Toronto M5K 1K6, for a demo of how this $10/month payment would retire the  $3,444.43 decremented at $10 per month, you might get what I did, i.e. a long string of minus $10 entries which is arithmetically correct but is a trivial answer to a different question.

Small wonder the banks receive (note: not “earn”) profit by the billions through economic thick and thin without providing any service or incurring any cost whatever.

Since we must all use banks, it’s a classic “gotcha”; because they have other devices they can then use that I could detail.

You do good investigative work: this belongs with it.

Best,

Frank Gue,

Professional Engineer.

Date:         19 April 2017

By:             Frank Gue B.Sc., MBA, P.Eng.,

2252 Joyce St., Burlington, ON L7R 2B5

905 634 9538    <frank.gue@cogeco.ca>

For:            Producers, Metro Morning, CBC Radio 1

cc:              Letters, TheSpec, Hamilton

Re:             Bank processes – your series – my file TD Time to Pay

My Rebate Reward statement (TD Bank credit card) says in part in the Bank’s own words, (rearranged to make sense in terms of a householder’s budget):

New balance:                      $ 3,444.43

Minimum payment:            $      10.00

The estimated time 

to pay your new balance

if you pay only the 

minimum payment

each month is:                    41 years and 3 month(s)

The statement in bold italics above is not true.  In fact, the time to pay $3444.43 with the bank’s suggested $10.00 monthly would accumulate forever at the stated interest rate of 19.99% since the monthly interest far exceeds the bank’s $10.00 minimum payment.

Further, since 53% of adult Canadians are innumerate according to StatsCan, a very large number of Visa credit card holders are unaware of what that 19.99% interest rate is doing to them.  This public ignorance is very helpful to the banks.

If you were to ask Mr. Frank Psoras, VP Credit Cards, TD Canada Trust, POB 3000, Toronto M5K 1K6 for a demo of the arithmetic suggested by this $10 payment, you might get a long run-down of $3,444.43 decremented at $10 per month, which is arithmetically correct but is a trivial answer to a different question.

Small wonder the banks receive (note: not “earn”) profit by the billions through economic thick and thin.  Since we must all use banks, it’s a classic “gotcha”; because they have other devices they can then use that I could detail.

You do good investigative work: this belongs with it.

Best,

Frank Gue,

Professional Engineer.

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