Credit cards have become a necessity for some people in society. Why not? They help out a person extend his cash flow more. If you are in a tight fit and would need to use cash, the credit card can be your answer.
Because of the nice sounding concept of extending the cash flow those credit cards give. People often fall into their trap too. People often become tempted to overuse their cards and not be able to pay off the debt.
Credit cards can be very helpful. But a person who has a credit card must know to use it wisely. The user must learn to avoid the pitfalls or certain charges that can make the use of credit cards burdensome. Here are the costs that you must try to avoid from credit cards.
The grace period is the time given by the credit card companies to a card user to pay off the debt past the due date without additional charges. Grace periods was more often used by the card companies in the past. Now, card companies are charging fees for a minor time or day of payment delayed.
Before, when you charged the maximum on your card but were able to pay it off before the end of the grace period, there will be no extra charges. Now companies have reduced the grace period of 25 days and some even removed it.
Remember that the purchase you make today will be accrued immediately. So check the contracts of the card you are about to get. If there are no grace periods before the interest will build up, find another card company.
Always know how much the late fees will cost you. This is because late fees can be the real burdensome fees. Card companies are making more money out of you because they have increased the late fees and removed grace periods.
So it is important, if possible to pay the bill immediately once you receive the card statement. Aside from paying large late fees, they will also report it to credit bureaus and will have a bad mark on your credit rating history or score. The card companies may also raise the interest rates you have when you don’t pay on time.
Bottom line is to make better use of your credit card by avoiding paying those late fees and reading the contracts carefully.