Tips to Avoid Credit Card Late Fees and Interest
Credit cards can be a necessary component of your life - whether you use them to float you through a time when you do not have the cash to pay for something or you use them for protection on large purchases, you need to know how to effectively pay them to avoid interest and late fees. Obviously avoiding late fees is simple - pay your bill on time. But there are a few other tricks of the trade that you can use to help you keep your fees minimized or non-existent.
Pay your Balance in Full
Almost every credit card contains a grace period, which starts at the end of one billing cycle and the due date of the new cycle. This grace period, however, only pertains to those consumers that pay their balance in full. For example, if you charged something for $300 on day 2 of your billing cycle and you pay it in full on or before your due date, you will not incur any interest charges. On the flip side, if you pay only $100 of that balance, you leave a remaining $200 to roll into the next billing period and you start incurring interest charges on day 1 of the new cycle. In addition, any new charges made during this new cycle will also be charged interest. The only way to keep the grace period going is to pay your balance in full every month.
Interest Adds Up
When you have used up your grace period on your quick loans with a credit checkand are now accumulating interest on every purchase you make on your credit card, the interest charges can get excessive. For example, if you make a charge for something on day 2 of your billing cycle and you already have a balance on your credit card, that new purchase instantly begins incurring interest charges. This means an estimated 26 days of interest before your bill arrives. That can add a significant amount of money to your purchase, even if you planned on paying it off when the bill arrived. If you have a balance on your credit card, it is best to avoid using that card until you can get it paid off completely.
Trailing interest can be hard to understand and get ahead of. For instance, say you pay off your balance on the due date of your bill. You still have interest charges that accrued before you paid the balance off, which means you still have a balance. That balance, no matter how small, continues to accrue interest in the next billing cycle. If you are unaware of these charges, you will likely wait another 28 days until the surprise bill arrives and you now have another bill to pay - this vicious cycle continues until you pay it off completely before any more interest accrues on the balance.
Pay your Bill on Time
Paying your bill on time might seem simple, but it is often overlooked. If you are still sending your payments by mail, you need to make sure to allow enough time for the payment to reach the provider and be processed - this means mailing it at least 10 days prior to the due date. If you pay online, pay close attention to the cut-off times for same-day payments if you are waiting until your due date; the same is true for telephone payments. Most credit card companies allow access to your account online, which enables you to check your balances and due dates at any given time, making it very easy to stay on top of your credit card payments and avoid the late fees.
Avoiding credit card late fees and interest payments are easy when you understand how credit cards work. By using your credit cards only when necessary and paying the balances off in full, you can minimize the amount of excess charges you pay, ensuring that you are not paying more than your actual purchases were worth in the first place.