Consumer Interest

You got an airline credit card because you had too many drinks at the airport, and 40,000 points sounded like a good idea...despite the $195 annual fee.

You proceed to put $2,000 on that credit card in the first 90 days so that you can get your points...after you purchased 1,000 $2 beers at a dive bar under a subway station.

Doesn’t matter how you paid for it. Unfortunately, you only had $1,500 available to pay off the card, and now your credit balance has $500. You'll pay monthly interest on that credit card.

That is also known as consumer interest.

The key differentiation from personal loans, like credit cards...and other loans, like mortgages and student loans...is the fact that the interest isn’t tax deductible.