Tuesday, August 02, 2005

Push your credit card limit and Pay thrrought the Nose

There may be an occasion when you run your credit card purchases over your approved limit.

Keep in mind that your Credit card company will apply an "Over Limit" fee. Depending on your card and the amount you are over, this fee can be a significant penalty, especially if you pay off the monthly balance.

Assuming you are assessed an "Over Limit" penalty of $15.00 (check the terms of your card) because you exceeded your monthly limit (lets say you went $100.00 over) and paid off the monthly balance.

While this one time fee appears to be costing you 15% for the extra $100.00 if you look at the cost of this money a little closer, on an annual basis, the true cost of this fee represents an annual interest rate that is closer to 180% making it some of the most expensive money you will ever borrow.


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