How Different Credit Card Features Work Together
Thursday October 4, 2007
Credit limit, minimum payment, finance charge, and grace period are all credit card terms you're probably familiar with. You may even know the "textbook" definition for them. But just what do these credit card features have to do with your credit cards?
You can easily have a credit card for years and never truly understand what's happening when you make purchases or payments. Do you know how your credit card balance affects your available credit? When you get charged a finance charge and when you don't? When late payments are reported to the credit bureau?
For details on the credit card process, read Understanding The Credit Card Process.
You can easily have a credit card for years and never truly understand what's happening when you make purchases or payments. Do you know how your credit card balance affects your available credit? When you get charged a finance charge and when you don't? When late payments are reported to the credit bureau?
For details on the credit card process, read Understanding The Credit Card Process.
Comments
I have the misfortune of having bad credit, and I’ll tell ya, alot of these credit card companies really stick it to you. You get ridiculously higher interest rates, higher annual fees, etc. I understand that it’s the price you pay for having past indiscretions, but at some point it’s downright predatory.
Want to see what I mean? Take a look at a site like Bad Credit Offers or any other site that shows bad credit card interest rates. Some of these credit cards tease you with a 9.9% APR, but take a look at those other rates. Ridiculous.
So yes, be aware of what you’re getting yourself into when it comes to credit cards. Or you will be sorry.
Unfortunately, when you have bad credit, you don’t have a lot of room to negotiate a lower interest rate on your credit cards.
If you end up having to get a high interest rate credit card, pay the balance in full each month to avoid finance charges. Then, after your credit score has improved, negotiate a lower interest rate or apply for a new credit card with a lower rate.