Your age doesn't matter: You can get at that money without penalty or even income taxes. Both taxes and the 10% penalty apply to the earnings on your contributions, though, until your odometer hits 59 1/2 and you've had the money socked away for five years (with a few exceptions, below).
The term âcompound interestâ means that any interest charges are added to the principal (which is the amount you originally borrowed) so that your debt grows exponentially. If you have a $100 debt and it accrues 10% interest every month, then the first month you will be charged ten dollars (100 x 0.10).With compound interest, that ten dollars is added to your original debt, so now you have $110 of debt.f you charge the $200 to your credit card, then the amount will show up on your monthly credit card bill and you will have a 30 day grace period to pay it off, after which youâll begin to accrue interest on it.
These days, most credit cards compound interest on a daily basis, not monthly. For example, letâs say you have a revolving balance of $10,000 on your credit card, and your daily interest rate is 0.041% (which is approximately equivalent to an APR of 15%).f you do not pay your credit bills on time, your credit card company can (and usually will) increase your interest rate. The amount that it gets increased depends on the individual situation, but it can be quite a lot.