Part 4: The Hidden Cost of Usury and Compounding Interest

By Black Hills Financial Planning

By now in this series, we’ve explored the origins of banking, the creation of the Federal Reserve, and how money actually works. Now it’s time to look at something that quietly shapes nearly every financial decision you make: usury and compounding interest.

Most people think of interest as just “the cost of borrowing.” But when you see how it compounds over time — and how deeply it’s woven into the financial system — you realize it’s one of the biggest reasons families struggle to get ahead.

What Is Usury?

Historically, usury meant charging any interest on a loan. Ancient Jewish law, early Christianity, and Islamic finance all condemned it. The reasoning was moral: money itself produces nothing, so charging for its use was considered exploitative.

Over time, societies softened their stance. Moderate interest came to be seen as acceptable — but excessive or predatory rates were still called usury.

Fast forward to today: what was once seen as immoral has become the foundation of modern banking. Interest is everywhere — in mortgages, credit cards, student loans, auto financing, and even government debt.

The Power of Compounding

Compounding means interest earns more interest over time. It’s often praised as the “eighth wonder of the world” when it comes to saving — but when you’re on the paying side, compounding works against you.

Consider this example:

• A $200,000 mortgage at 6% over 30 years costs more than $430,000 in total payments. Over half of what you pay is interest.

• A $5,000 credit card balance at 18%, with only minimum payments, can take decades to pay off — with interest charges far exceeding the original debt.

This isn’t an accident. The system is designed so that banks profit most when debt stretches over long periods.

The National Picture

The average American household is drowning in compounding interest:

• Mortgages span 15–30 years.

• Student loans often linger for decades.

• Credit cards carry high rates, averaging over 20% in recent years.

As a result, three-quarters of household income goes toward interest and taxes. That means only a small portion of what you earn actually builds wealth for your family.

Think about that: you work hard all week, but most of your paycheck is spoken for before it even hits your account.

The Systemic Trap

Why does this matter so much? Because the very design of modern money ensures that usury is unavoidable. Every dollar in circulation was borrowed into existence — and it must be paid back with interest. But since there’s never enough money to cover all the principal plus interest at once, the system requires continuous borrowing.

That’s why personal debt, corporate debt, and government debt all grow year after year. It isn’t because people are irresponsible — it’s because the system itself demands it.

How This Affects Families

On the ground level, here’s what this looks like for everyday families:

• Paycheck pressure – A large percentage of income goes toward servicing debt rather than building assets.

• Lost opportunities – Money spent on interest can’t be invested in retirement, education, or business growth.

• Stress and uncertainty – Debt weighs heavily on families, limiting flexibility and peace of mind.

The result is a cycle: you borrow to meet needs, then work harder to cover interest, but inflation erodes your savings, so you borrow again.

Flipping the Script: Becoming the Bank

Here’s the good news: compounding interest doesn’t have to be your enemy. Wealthy families have long used it to their advantage — not by avoiding interest entirely, but by making sure they are on the receiving end rather than the paying end.

The Rockefellers are a prime example. For more than six generations, their fortune has grown through the use of trusts and financial structures that allowed them to lend to themselves, repay themselves, and keep compounding working in their favor.

At Black Hills Financial Planning, we help families apply these same principles on a practical scale. Instead of sending your hard-earned money to banks, we show you how to:

• Create a system where you pay yourself interest.

• Eliminate debt in under nine years without spending more than you do today.

• Protect your assets so compounding works to grow wealth for your family, not for financial institutions.

Why This Matters Now More Than Ever

Inflation and rising interest rates mean that debt costs are climbing for millions of Americans. Credit cards, mortgages, and student loans have become more expensive than at any time in recent decades. If families don’t find a way to get on the other side of compounding interest, they risk being trapped in cycles of debt that last a lifetime.

But history shows us this isn’t inevitable. Just as past generations learned to adapt when banking changed, today’s families can adapt by understanding the hidden cost of usury and taking control of how they spend and save.

Conclusion

Usury and compounding interest may seem like abstract financial concepts, but they shape every paycheck, every loan, and every dollar in circulation. What was once considered immoral is now baked into the very structure of modern money.

The choice for families today is simple: either let compounding interest work against you, or learn to make it work for you.

👉 If you’re ready to flip the script and discover how to eliminate debt, protect your income, and build wealth that lasts, schedule a free consultation with Black Hills Financial Planning today. Together, we’ll help you stop paying interest to banks — and start earning it for yourself.