Tuesday, May 17, 2005

Caution with Credit Card Balances

Check the fine print of your credit card agreement

Understanding the terms of your credit card can save you hundreds of dollars in hidden fees generated through the interest calculation method.

Pay off your Credit Card Balance BEFORE you use it again.

Do you carry a balance on your credit card?

Recent changes at some financial institutions will make it even more difficult to pay off your balance and will keep you paying HIGH INTEREST RATES longer.

The latest tactic by banks has changed the traditional grace period provisions on new purchases. With some Cards, anyone who carries a balance will be charged interest on new purchases from the day
of purchase this is a significant shift that will cost you a great deal.

To undertstand the impact of this shift, look at how the grace period works for those who pay off their balance:
Purchases made are interest free until the due date. (approximately 30 days use of money interest free to you)

For those carrying a balance, even if it is minimal new purchases could now accrue interest from date of purchase.
This gives the card company approximately 30 days of interest before your payment is due.
Say you make $1,000.00 of new purchases while carrying a balance, you can expect to accrue an additional $16.00 (estimated)in interest.

Clear up past due credit card balances

If you are carrying a balance, now is the time to bring all those outstanding balances up to date and restructure your Credit Card use.


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