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Credit Card Rules - Consumer Warnings

Christina Thomas
 


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We all know that if you have a credit card, it’s usually best to settle the money you’ve charged in full by the end of the month. After all, if we manage to do that, the credit card functions very much like a debit card in a sense, but caard-holders gather in the benefits that credit companies so often provide to promptly-paying customers. Of course, this good deed may not be what it seems: it is the very fact that many don’t pay the balance in full each month that supports the credit machine (indeed; almost $115 billion that they pull in in every year comes from this).

Obviously, we comprehend and admit this as quintessential to credit-card-life; after all, there should be some cost to borrowing money, right? Hidden - more often than not - in the tomes of credit-card lore, a practice that would widen most of our eyes were we aware of it. There are many credit-card companies that begin charging you interest not from the moment they actually buy the item you charged from the merchant, but from the moment YOU charged it; there can be several days’ difference between the two. This means that they are slapping you with an interest charge for no defensible reason, logically, because interest can't accrue on the promise of a charge; only on the charge, itself. Right??. It's instructive to note why this matters.

Consider: one can say that there shouldn’t be a problem because you purchased the merchandise on that date. In truth, however, it isn’t really fair, because if the company hasn't even bought the item yet, why should they start charging you interest on it!? In the highly automated computer systems of credit card companies, your account pretty much shows the effects of their purchase immediately, for all intents and purposes.

If you decided to annull the purchase in the time between when you charged it and they paid the store, your account would stay intact; so, it makes no sense for you to be charged interest on this “phantom" purchase. Since only some credit card companies do this, it is best to locate a company that doesn’t, if you aren't the type to rectify your credit-card balances by month's end. It is important to realize that when dealing with credit companies, so much goes on behind closed doors, it can be hard to keep track of so many little things we need to be watching with our similarly hectic schedules.

Another thing to watch out for are changes from the common 25-day interest-free period on purchases. As if to buttress the previous statement that while credit companies often seem to reward customers who pay in full monthly - and so aren't hit with interest-rate charges - this is mostly just for appearances, so that they can ensnare more customers; credit companies are only in business solely because most card-holders don’t pay off their balances every month; extensive research makes it clear that this will occur.

Their underlying intentions are shown by an increasingly common habit of decreasing this grace period to 20 days (almost without warning!). As if to make it even worse, the grace period is lessened to about 23 or 20 days solely for those cardholders who pay the monthly balance in full. It’s almost as though they’re trying to catch you unawares, and of course, they do take a cut that makes this practice worthwhile. There is still an option, however; all you have to do is ask them to return to the previous due date of 25 days.

We all know that if you have a credit card, it’s usually best to settle the money you’ve charged in full by the end of the month. After all, if we manage to do that, the credit card functions very much like a debit card in a sense, but caard-holders gather in the benefits that credit companies so often provide to promptly-paying customers. Of course, this good deed may not be what it seems: it is the very fact that many don’t pay the balance in full each month that supports the credit machine (indeed; almost $115 billion that they pull in in every year comes from this). Obviously, we comprehend and admit this as quintessential to credit-card-life; after all, there should be some cost to borrowing money, right?

Hidden - more often than not - in the tomes of credit-card lore, a practice that would widen most of our eyes were we aware of it. There are many credit-card companies that begin charging you interest not from the moment they actually buy the item you charged from the merchant, but from the moment YOU charged it; there can be several days’ difference between the two. This means that they are slapping you with an interest charge for no defensible reason, logically, because interest can't accrue on the promise of a charge; only on the charge, itself. Right??.

It's instructive to note why this matters. Consider: one can say that there shouldn’t be a problem because you purchased the merchandise on that date. In truth, however, it isn’t really fair, because if the company hasn't even bought the item yet, why should they start charging you interest on it!? In the highly automated computer systems of credit card companies, your account pretty much shows the effects of their purchase immediately, for all intents and purposes. If you decided to annull the purchase in the time between when you charged it and they paid the store, your account would stay intact; so, it makes no sense for you to be charged interest on this “phantom" purchase. Since only some credit card companies do this, it is best to locate a company that doesn’t, if you aren't the type to rectify your credit-card balances by month's end.

It is important to realize that when dealing with credit companies, whether the run-of-the-mill establishments or the high-end black card outfits, that so much goes on behind closed doors, it can be hard to keep track of so many little things we need to be watching with our similarly hectic schedules. Another thing to watch out for are changes from the common 25-day interest-free period on purchases. As if to buttress the previous statement that while credit companies often seem to reward customers who pay in full monthly - and so aren't hit with interest-rate charges - this is mostly just for appearances, so that they can ensnare more customers; credit companies are only in business solely because most card-holders don’t pay off their balances every month; extensive research makes it clear that this will occur.

Their underlying intentions are shown by an increasingly common habit of decreasing this grace period to 20 days (almost without warning!). As if to make it even worse, the grace period is lessened to about 23 or 20 days solely for those cardholders who pay the monthly balance in full. It’s almost as though they’re trying to catch you unawares, and of course, they do take a cut that makes this practice worthwhile. Consider the Discover More Card , for example; the $5 cashback program makes it a very good card to pay the monthly balance and reap the rewards. There is still an option, however; all you have to do is ask them to return to the previous due date of 25 days. That said, there are many transparent credit card companies out there such as Barclay's and the Visa Black , which notify their consumers of billing-cycle amendments.

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