Your credit card’s fine print
All credit cards come with terms and conditions, which more often than not, are neglected by most credit card holders. If you are one of those who typically don’t mind reading your card’s terms and conditions, now is the best time to start scrutinizing these details for the benefit of your own financial health.
Terms and conditions usually vary depending on the credit card issuer, but there are basic terms and conditions that are generally included and these are the following:
Annual percentage rate
The annual percentage rate varies depending on your credit card. Many issuers may offer you introductory offers for as low as 0%, but take note that it’s usually only for a limited time. Moreover, you should be extra careful because the 0% offer may be revoked if your payment is late or your account exceeds your credit limit. Bear in mind that rates that appear too low at first typically expire after just a short period of time and then much higher rates take into effect.
Grace period for purchases
Usually, the grace period given for purchases last around 20 to 25 days, again depending on the card issuer. Finance charges apply upon the expiration of the grace period if the balance is not fully-paid.
Although there are many card issuers that do not charge annual fees, it’s still a good thing to check with the issuer before you accept any credit card offer.
Minimum finance charge
Carrying a balance on your credit card will entail a finance charge. Computation for this will depend on the interest rate and your credit card issuer’s policy. The minimum finance charge is usually somewhere between $0.50 to $1.00. Read your service agreement for details on your card’s minimum finance charge because if you’re not too keen on the details, you may be surprised to realize that finance charges can add up to your monthly balance.
Transaction fee for cash advances
While it may seem tempting to make cash advances on your credit card, you have to control yourself from doing so because additional charges are attached to this type of transaction. Teller fees and transaction fees of up to 3% may be charged to you.
Over limit fee
Exceeding your card’s limit entails an over limit fee. Issuers can charge you up to $29 every time your card is over the limit. Try your best not to spend beyond your credit limit, not only to avoid over limit charges, but also to maintain a positive credit history and a good credit score.
You also can call your credit card issuer if you have any questions about your terms and conditions.
For more great credit tips and news tune in to The Graceful Credit Show live every Sunday at 3:00pm EST on WCHB News Talk AM 1200.
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