Credit Card Questions And Answers

maryam

Image by TheDigitalWay from Pixabay 

When choosing a credit card you should ask yourself some questions..

How long is the grace period?

The grace period is that the number of days you've got to pay your bill fully without triggering a finance charge. For example, the mastercard company may say that you simply have “25 days from the statement date, provided you paid your previous balance fully by the maturity .” The statement date is given on the bill.

The grace period usually applies only to new purchases. Most credit cards don't provides a grace period for cash advances and balance transfers. Instead, interest charges start right away.

If you carried over any a part of your balance from the preceding month, you'll not have a grace period for brand spanking new purchases. Instead, you'll be charged interest as soon as you create a sale (in addition to being charged interest on the sooner balance you've got not paid off). Look on the mastercard application for information about the “method of computing the balance for purchases” to ascertain if new purchases are included or excluded. Information on methods of computing the balance is within the section “How is that the finance charge calculated?”

How is the finance charge calculated?

The finance charge is that the dollar amount you pay to use credit. The amount depends partially on your outstanding balance and therefore the APR.

Credit card companies use one among several methods to calculate the outstanding balance. The method can make an enormous difference within the finance charge you’ll pay. Your outstanding balance may be calculated

 

Over one billing cycle or two,

 

Using the adjusted balance, the typical daily balance, or the previous balance, and

Including or excluding new purchases in the balance.

Depending on the balance you carry and therefore the timing of your purchases and payments, you’ll usually have a lower finance charge with one-cycle billing and either

The average daily balance method excluding new purchases,

The adjusted balance method or the previous balance method.

What is the minimum finance charge?

Some credit cards have a minimum finance charge. You’ll be charged that minimum albeit the calculated amount of your finance charge is a smaller amount . For example, your finance charge could also be calculated to be 35¢--but if the company’s minimum finance charge is $1.00, you’ll pay $1.00. A minimum finance charge usually applies only you want to pay a finance charge--that is, once you carry over a balance from one billing cycle to subsequent .

What are the fees?

Most credit cards charge fees under certain circumstances:

Annual fee (sometimes billed monthly). Charged for having the card

 

Cash advance fee. Charged when you use the card for a cash advance; may be a flat fee (for example, $3.00) or a percentage of the cash advance (for example, 3%)

Balance-transfer fee. Charged once you transfer a balance from another mastercard (Your mastercard company may send you “checks” to pay off the opposite card. The balance is transferred once you use one among these checks to pay the quantity due on the opposite card.)

Late-payment fee. Charged if your payment is received after the maturity 

 

Over-the-credit-limit fee. Charged if you go over your credit limit

Credit-limit-increase fee. Charged if you invite a rise in your credit limit

Set-up fee. Charged when a replacement mastercard account is opened

Return-item fee. Charged if you pay your bill by check and therefore the check is returned for non-sufficient funds (that is, your check bounces)

Other fees. Some mastercard companies charge a fee if you pay by telephone (that is, if you arrange by phone for payment to be transferred from your bank to the company) or to hide the prices of reporting to credit bureaus, reviewing your account, or providing other customer services. Read the knowledge in your mastercard agreement to ascertain if there are other fees and charges.

What are the cash advance features?

Some credit cards allow you to borrow take advantage addition to creating purchases on credit. Most mastercard companies treat these cash advances and your purchases differently. If you propose to use your card for cash advances, search for information about

Access. Most credit cards allow you to use an ATM to urge a advance . Or the mastercard company may send you “checks” that you simply can write to urge the advance .

 

APR. The APR for cash advances could also be above the APR for purchases.

Fees. The mastercard company may charge a fee additionally to the interest you'll pay on the quantity advanced.

Limits. Some credit cards limit cash advances to a dollar amount (for example, $200 per cash advance or $500 per week) or a portion of your credit limit (for example, 75% of your available credit limit).

How payments are credited. Many mastercard companies apply your payments to purchases first then to cash advances. Read your mastercard agreement to find out how your payments are going to be credited.

How much is the credit limit?

The credit limit is the maximum total amount--for purchases, cash advances, balance transfers, fees, and finance charges--you may charge on your credit card. If you re-evaluate this limit, you'll need to pay an “over-the-credit-limit fee.”

What kind of card is it?

Most mastercard companies offer several sorts of cards:

Secured cards, which require a security deposit. The larger the safety deposit, the upper the credit limit. Secured cards are usually offered to people that have limited credit records--people who are just starting out or who have had trouble with credit within the past.

Regular cards, which don't require a margin and have just a couple of features. Most regular cards have higher credit limits than secured cards but lower credit limits than premium cards.

Premium cards (gold, platinum, titanium), which supply higher credit limits and typically have extra features--for example, product warranties, travel insurance, or emergency services.

Read Also : Credit Card Company Tricks

Does the card offer incentives and other features?

Many mastercard companies offer incentives to use the cardboard and other special features:

 

Rebates (money back) on the purchases you make

 

Frequent flier miles or phone-call minutes

 

Additional warranty coverage for the items you purchase

 

Car rental insurance

Travel accident insurance or travel-related discounts

 

Credit card registration, to assist if your wallet or purse is lost or stolen and you would like to report that each one your credit cards are missing

Credit cards may also offer, for a price,

Insurance to hide the payments on your mastercard balance if you become unemployed or disabled, or die. Premiums are usually due monthly, making it easy to cancel if the payments are above you would like to pay otherwise you decide you don’t need the insurance any more .

 

Insurance to cover the first $50 of charges if your card is lost or stolen. Under federal law, you are not responsible for charges over $50.

Before you check in to buy any of those features, think twice about whether it'll be useful for you. Don’t pay for something you don’t want or don’t need.

Labels: Credit Card

Thanks for reading Credit Card Questions And Answers. Please share...!