Posts Tagged ‘Borrowing Money’

The first step in doing a credit card payment is to understand your monthly billing. The following are terms you will encounter:

Statement date The date that the bill was printed.

Payment due date this is the day that the cardholder must pay any outstanding balance. Payments made after the said date will be credited, but will also be fined a lateness fee.

Total Amount Due It consist of the unpaid amount from the previous month, as well as purchases, payments and interest charges for the current month. When the cardholder pays this amount on or before the payment due date, no interest charges will be imposed.

Minimum Amount Due this is a smaller fraction of the total amount due. To maintain a good standing with the card company, pay at least this amount, if you cannot afford to pay the total amount due.

Finance charge if the cardholder is not able to pay the total amount due, then he is charged a fee for borrowing money from the company. It is calculated based on the interest rate of the card. For detailed information on how this is calculated, go to http:www.abcguides.comcreditcardscci_faq.htm#finance_charges.

Late charges Paying or not, after the payment due date, is penalized with late charges. Avoid this as much as possible as this is almost 2X the interest rate of the finance charge. Consistently missing payment may lead to cancellation of the card and a bad credit standing.

Having understood the information on your monthly bill, here are simple strategies for paying your credit card charges:

Always pay the total amount due. Paying only the minimum amount due means being charged for a high interest rate on the unpaid amount.

If you cannot pay the total amount due, pay as much as you can above the minimum amount due. This strategy aims to reduce the finance charges that you have to pay for settling partially.

Do partial payments as early as possible (as soon as you receive the billing). Finance charges are based on the unsettled amount and the time it remains unsettled, so the shorter it is, the lower it will be for finance charges.

Some card companies reward loyal cardholders by accumulating points for their spending. Check if reward points can be credited back as payment.

Lastly, pay the total amount due. Just to emphasize the point!

There are many avenues to pay your card bill. Theres the traditional way of waiting in line, or the faster way of paying electronically through your computer, cash machine or mobile phone. With all these conveniences at hand, it is quite unforgivable to miss your payment due date.

Therefore, settle smart: pay the total, pay on time.

Nowadays, many services have been improved to lessen the number of step for processing them and make it more convenient for consumers. Credit card business is also developed to satisfy customers need. Credit card applicants generally should not worry if they comply with all the requirements set by their card issuer. Some of the things that are checked include income ranges, age and current addresses. For potential owners who have moved, they must make sure that they indicate correct information on their previous place of residence, including when and how long they stayed at their former address.

Individuals who want no fuss credit card applications should expect to have their credit ratings given a thorough review. This review will be conducted by issuers to establish if the applicant poses any risk. Such a check will include the individual’s ability to remain consistent with monthly rental payments or repayments and mortgage or loan profiles. An applicant with a history of financial troubles will have problems getting their applications processed, as this issue will have an impact on their credit rating.

There are many details that the credit card providers have to check such as delayed payments on recent or previous cards, utility bills or loans, and the number of rejected applications, if any. Companies can also probe deeper to the extent that they check the voter electoral register to verify an applicant’s address and even the county court to find any judgments against or records on file.

Credit card applicants should realize that low interest providers are more likely to impose a higher number of restrictions and possibly accept only individuals with perfect credit histories. In such cases, the more likely option is for an applicant to consider cards with higher interest rates.

Since borrowing money entails charges, a credit card applicant should make an exhaustive review of all terms and conditions related to their application, preferably across different credit or charge cards. Among the key terms potential card owners must consider are the annual percentage rate, the free or grace period, transaction and annual fees, and adjusted and previous balances.

To verify that the applicant has provided correct information, the credit card providers will sometimes mail a credit card application to their home. Credit card applications are now more convenient than ever, they can be applied for by telephone and internet-based processing.

It is important to know that credit card applicants should always exercise extreme caution when providing their social security number and other personal information during the application process.

Throughout your life youre the history of you credit repayment will follow you. Ensuring, therefore, that you have a good prior history of borrowing money is vital. Insofar as credit cards are concerned, the following is a brief guide to how to build your credit card credit history.

If you have never financed a purchase on credit previously, applying for a credit card can be a little tricky, as the issuer will have no record of yours to judge whether or not you are a credit risk or safe to lend to. As such, before you apply for any of the major credit card issuers, youll likely need to apply to either a minor credit card issuer, such as store, or apply for some form of hire purchase, such as a car loan or to buy a television. Once you have done this, it is then very important that you make the repayments timely and in full.

Provided that you do pay your statement invoices on time and in full, youll start to create a good credit history. Obviously no lender will take one payment as evidence of your capabilities to repay your debt on time and in full. However, so long as you continue to this for a period of time, even a relatively short period of time, such as three or six months, youll then start to find that other lenders are willing to lend you money based on your good credit history.

If applying for a store card or hire purchase loan doesnt seem an acceptable way for you to create a good history of credit, an alternative you can consider is a secured credit card. Essentially a secured credit card requires you to maintain your credit card from a bank account and the limit of your credit will be a percentage of your account holdings. While not strictly a credit arrangement, the issuer then gets to see that you have the capabilities to repay the credit.

Keep in mind that your credit rating will be essential to any credit card application you make. Consequently, before applying for a card you should really make an application to a credit rating agency to ensure that you have managed to build your credit card history up sufficiently not to have too much difficulty applying. In the event that you think the credit rating report is wrong, you should immediately set out the reasons why you think this to the agency so that you can correct any errors in you history before you apply for the credit card

If you are new to the world of credit cards, then you need to know the basics before going ahead and choosing the right credit card. Although all the terms and companies offering cards can seem confusing at first, if you do your homework then learning the basics takes no time at all. Here are some hints and tips regarding the basics of using and finding a credit card:

Borrowing money

Credit cards are probably the most common way of borrowing money. Credit cards are available from so many different sources, both offline and online. There is a wide variety of different types available, and at first glance it can be very confusing. However, what you need to remember with all credit cards is that you are borrowing money, and that the credit is not free. Once you realise this then you will be in a better position to get a card that suits your needs.

Interest rates

Unless you intend to pay your credit card bill off in full each month, then you need to be aware of the interest rates of cards. The rate is calculated as APR, or Annual percentage rate. The typical rates right now are around 13-18%, depending on the company you choose. Lower interest rates are obviously better, but remember that there can be other charges as well such as late fees or transfer fees, etc. Also, if you are going to pay the money off very slowly, then you should look at other types of money lending as credit cards do have high interest rates.

Paying your bill

The options for paying your bill vary, and some cards have different requirements. A few cards require you pay the whole bill each month, but most only require that you pay a minimum payment. This is usually around 2% of the entire balance. If you are not paying back your card in full each month, then pick a card that has benefits for doing so. Some cards offer cashback of around 0.5% or more, meaning that you get money back each time you buy something.

Fees

Most credit cards have a range of fees that you will be charged. These include fees for late payment, over-limit fees, and annual usage fees. If you know you might be late with payments sometimes, then pick a card with low late fees. Also, try and avoid cards with annual fees, unless the rest of the package is very good. Some cards have introductory offers, like no interest or fees on transfers for six months. These cards are good if you need to transfer debt or you know you can pay back the balance during the introductory period.

Debt

Remember, if you are not careful you can get into credit card debt that can be hard to get out of. Only spend what you can really afford, and try to pay back as much of the balance as you can each month. Credit cards are great for emergencies or spreading the costs of expensive items, and if you know the basics then you will get a better deal on your card.