INDONESIA-Central Bank will prohibit credit card issuers charge interest bloom, aka compound interest. Rules will be determined to learn from the victim that the bill continues to swell due to the addition rate constant. Therefore, Bank Indonesia will revise relevant regulations. How does the principle of current interest now?

In current practice, the principal amount of debt constantly being added to the interest of the remaining arrears. The count is a daily, using the benchmark 360 days a year. Then, the result of adding it to load the next. For bill, beginning January 1, 2013, Bank Indonesia pledged to implement a new policy: the interest charged is entitled to the unpaid principal amount.

For example, on March 1 you shop with credit cards amounted to Rp 1,000,000. Your card interest rate is 3.5 percent per month or 42 percent in a year.

Date printed card bills is March 14 and a maturity of two weeks later, the date 28 in the same month.

You pay the bill on March 17. But not full, but only 10 percent or Rp 100,000, according to the minimum payment limit. The question is, how much should you pay, when the second bill arrived on 14 April?

With the current model, the calculation is:

Considering there are still remaining unpaid principal, then the actual payment by plastic card is counted as a loan must bear interest. In the bill the next month will appear. What is billed?

The first calculation:
The difference between the transaction with the arrival of the bill is 14 days. Multiply the number of days with interest rates this year (42 percent or 0.42). The result multiply the return value of the transaction is $ 1,000,000 and divided by the number of days in a year (360). So get Rp 16,333. It’s called the first interest calculation.

The second calculation:
For the second flower, which counted the number of days is the period March 15 to 17 (until you pay the first bill) or three days. By calculating the first model: the number of days multiplied by the interest a year, then multiplied by another number of bills. The result is divided by 360 days. So the result is $ 3,500. Done? Not yet!

The count of three:
There is still a third interest charges that remain include the rest of the day is not charged interest until the date of the second bill arrived. So, 18 March to 14 April or 27 days. However, the multiply factor is the remaining principal is Rp 900,000 bills because you’ve got to pay 10 percent earlier. And the result: Rp 28,350.

So, what is the value printed on the paper bills that come the second period on April 14 that?
Sum the first interest of up to three plus the remaining principal amount of USD 900,000.The total amount of Rp 948,183. Here’s what you pay.

If desired by the Bank Indonesia bills limited to the principal to be paid, then according to new regulations, which bears interest is $ 900,000. Alias ??amount has not been coupled with the flowers last well as other additions.

BI hopefully not fails to plan its policy earlier. Thus, customers who do require a credit card could be better protected.

As anticipated, should be more careful use of credit cards. The most surefire way to prevent strangulation compound interest is paid in full at the time the first bill. Therefore, the flowering period has not yet arrived. Dues are paid each year to be useful even with the presence of an interest-free service.

Conversely if not repaid, then the credit card payment facility is no longer just. Credit cards will be the ticket to get the debt that the interest continues to bloom until the strangle. If you have this, ran before the debt collectors come.