Save Money By Understanding Your Credit Card
By: Peter Kenny
Around £6billion a year is lost due to credit card users not understanding how their credit card works. Too many people are dazzled by the latest deals offered by credit card companies and end up paying more than they should, simply because of a lack of any real understanding on how the introductory deal works that they took advantage of.
Millions of us have taken advantage of these offers, which include low promotional rates and the favourite one for the credit card issuers (until it came back to haunt them) the 0% deals on balance transfers or on both purchases and balance transfers, but recent research has revealed that those of us who do not understand the workings of these deals, could be costing ourselves £200 extra in interest payments.
Why am I getting charged interest?
The main reason for this is that most credit card companies always put the payments that you make towards the cheapest debt first and with many making use of the 0% balance transfer deals. When you switch your existing debt from one lender to another to save on interest repayments, the lender will pay the balance transfer deal first, as this is the debt that is carrying the lowest interest rate and any new purchases made on the card will mount up. All new purchases made are charged at the standard APR.
How does this happen?
Lets give you an example of this to make it a little clearer, for talking sake say you have a debt of £3,500 on your credit card and it consists of a balance you have transferred from another credit card company to the value of £2,000, you have made new purchases of £1,000, using the card in the standard way and withdrew cash from ATM’s to the tune of £500, with you paying back your card the money will be put towards the balance transfer first and the new purchases and cash withdrawals will be taking on the interest charges right away, which could leave you paying £200 more in interest repayments.
Earlier in the article I said that most credit card companies work this way, which means there are some that do not, most notably included in those who do not are Nationwide and the HSBC Black card, who revert to paying the most expensive debt first, leaving the lower APR debt unpaid until such a time as when the more expensive debt is cleared, which is a fairer and less sneakier way of attributing someone’s payments to their debts, where as the others are only taking away the goodness of the deal that they have offered you in the first place, by giving you in one hand and taking it away from the other.
What can I do to stop paying excess interest?
When dealing with these deals read the small print, as it always makes sense of where you stand when it comes to your finances, as knowing where you are in terms of your repayments will save you the cash that you were trying to save in the first place, though always having a clear balance at the end of each month is always the ideal scenario, but as we all know life and our finances are not always that simple.
Read Also:
Choose the Right Credit Card
Debit card versus Credit Card
Basic Information of Credit Card
Monday, April 13, 2009
Choose the Right Credit Card
Choose the Right Credit Card
By: Brian Shoemaker
If you do, you could earn great rewards, save money or even earn money. Some people think every credit card is the same plus or minus a couple tenths of an interest point. I use to. This couldn't be more wrong.
Do you do a lot of traveling? Do you have a large balance on a high interest credit card? Would you like to receive cash back on purchases?
Some credit cards offer points when you fly, purchase gas or dine out which can be redeemed for great rewards. So, if you do a significant amount of traveling look for a credit card that offers rewards for these types of purchases. The points you earn could be used on future flights and hotel stays.
If you have a huge balance on a high interest credit card, this is costing you extra money which could be avoided with a lower interest credit card. Look for a credit card that offers a low introductory rate on balance transfers and offers the standard APR thereafter.
Some credit cards offer you cash back on the purchases you make at certain retailers. So, If you use your credit card a lot, look for a credit card that offers cash back at the stores you frequent most.
Read also:
Debit card versus Credit Card
Basic Information of Credit Card
By: Brian Shoemaker
If you do, you could earn great rewards, save money or even earn money. Some people think every credit card is the same plus or minus a couple tenths of an interest point. I use to. This couldn't be more wrong.
Do you do a lot of traveling? Do you have a large balance on a high interest credit card? Would you like to receive cash back on purchases?
Some credit cards offer points when you fly, purchase gas or dine out which can be redeemed for great rewards. So, if you do a significant amount of traveling look for a credit card that offers rewards for these types of purchases. The points you earn could be used on future flights and hotel stays.
If you have a huge balance on a high interest credit card, this is costing you extra money which could be avoided with a lower interest credit card. Look for a credit card that offers a low introductory rate on balance transfers and offers the standard APR thereafter.
Some credit cards offer you cash back on the purchases you make at certain retailers. So, If you use your credit card a lot, look for a credit card that offers cash back at the stores you frequent most.
Read also:
Debit card versus Credit Card
Basic Information of Credit Card
Wednesday, April 8, 2009
Debit Card vs. Credit Card
Debit Card vs. Credit Card, What Are The Differences ?
By: James H. Dimmitt
Ah, the "good old days". If you are a baby boomer, like me, then you probably remember how important it was to rush to the bank on payday. You had to get there before the teller lanes closed so that you could have your "cash allowance" for the week. Otherwise, if you needed cash you had to write a check, then go to the bank, and "cash" the check for real cash.
Fortunately the days of the mad rush to get cash from the bank are long gone. We now enjoy the convenience of using a nearby automatic teller machine (ATM) or you can even get "cash back" at your local grocery, hardware or convenience store.
The card you use at the ATM is known as a debit card. When debit cards first appeared it was easy to tell them apart from credit cards. Debit cards didn't have a credit card company logo on them; instead, they usually just had your bank name, your account number and your name.
Today debit cards look exactly like credit cards even carrying the same logos. Both types of cards can be swiped at the checkout counter , used to make purchases on the internet, or to pay for the fill-up at the gas pump.
When you use your debit card to make a purchase, it's just like using cash. The account that is attached to your debit card, in most cases your checking account, is automatically debited when you use your debit card. The cost of your purchase is deducted from the funds you have in that account.
On the other hand, when you use your credit card to make a purchase you are using someone's else's money, specifically the issuer of the credit card, usually a banking institution.
In effect, you agree to pay them back the money you borrowed to make your purchase. In addition you will also pay interest on the money "loaned" to you at the rate which you agreed to when you applied for their credit card. This is known as the annual percentage rate (APR).
While the two cards might act and look alike, the levels of consumer protection that each type of card provides can be different.
Under federal law, if someone steals your credit card you're only responsible to pay the first $50 of unauthorized charges. However, if you notify the credit card issuer before a thief is able to make any charges you may be free from all liability. If the credit card is not physically present when an unauthorized or fraudulent purchase is made, such as over the internet, you're also free from liability for those charges.
MasterCard and Visa offer zero-liability protection where you won't pay any charges if someone uses your credit card to make an unauthorized purchase.
The protection offered to debit card fraud is similar but with a few exceptions. For example, your liability under federal law is limited to $50, the same as for a credit card, but only if you notify the issuer within two business days of discovering the card's loss or theft. Your liability for debit card fraud can jump up to $500 if you don't report the loss or theft within two business days.
And if you are the type of person that gives a passing glance to your monthly bank statement, you could be totally liable for any fraudulent debit card charges if you wait 60 days or more from the time your statement is mailed.
Visa and MasterCard zero-liability protection applies to your debit card but only for transactions that do not involve the use of your PIN (personal identification number).
Additional protection against fraudulent use of your credit or debit cards may be available through your homeowner's or renter's insurance. Check your policy or with your agent for more information about your coverage.
Also be aware that you should contact your card issuer by certified letter, return receipt requested, after you've contacted them by phone to protect your consumer rights.
As for which card to use for what type of purchase, most experts agree that you should use your debit card for the same type of purchases you'd make as if you were using cash. Therefore, it makes more sense to use your debit card than your credit card at the grocery store or gas station (provided you have sufficient funds to cover these purchases of course).
Avoid using your debit card for any online purchase or for something which is expensive. Why ? You'll find it much easier to dispute a charge when you use your credit card. If your gold-plated, limited edition, hip-swinging Elvis wall clock arrives broken, your credit card company will remove the charge until the problem is resolved.
With your debit card you are stuck dealing with the merchant directly to resolve any problems with a purchase, even if your banking institution could really use a gold-plated, limited edition, hip-swinging Elvis wall clock of their very own.
See also:
Credit Card Basic
By: James H. Dimmitt
Ah, the "good old days". If you are a baby boomer, like me, then you probably remember how important it was to rush to the bank on payday. You had to get there before the teller lanes closed so that you could have your "cash allowance" for the week. Otherwise, if you needed cash you had to write a check, then go to the bank, and "cash" the check for real cash.
Fortunately the days of the mad rush to get cash from the bank are long gone. We now enjoy the convenience of using a nearby automatic teller machine (ATM) or you can even get "cash back" at your local grocery, hardware or convenience store.
The card you use at the ATM is known as a debit card. When debit cards first appeared it was easy to tell them apart from credit cards. Debit cards didn't have a credit card company logo on them; instead, they usually just had your bank name, your account number and your name.
Today debit cards look exactly like credit cards even carrying the same logos. Both types of cards can be swiped at the checkout counter , used to make purchases on the internet, or to pay for the fill-up at the gas pump.
When you use your debit card to make a purchase, it's just like using cash. The account that is attached to your debit card, in most cases your checking account, is automatically debited when you use your debit card. The cost of your purchase is deducted from the funds you have in that account.
On the other hand, when you use your credit card to make a purchase you are using someone's else's money, specifically the issuer of the credit card, usually a banking institution.
In effect, you agree to pay them back the money you borrowed to make your purchase. In addition you will also pay interest on the money "loaned" to you at the rate which you agreed to when you applied for their credit card. This is known as the annual percentage rate (APR).
While the two cards might act and look alike, the levels of consumer protection that each type of card provides can be different.
Under federal law, if someone steals your credit card you're only responsible to pay the first $50 of unauthorized charges. However, if you notify the credit card issuer before a thief is able to make any charges you may be free from all liability. If the credit card is not physically present when an unauthorized or fraudulent purchase is made, such as over the internet, you're also free from liability for those charges.
MasterCard and Visa offer zero-liability protection where you won't pay any charges if someone uses your credit card to make an unauthorized purchase.
The protection offered to debit card fraud is similar but with a few exceptions. For example, your liability under federal law is limited to $50, the same as for a credit card, but only if you notify the issuer within two business days of discovering the card's loss or theft. Your liability for debit card fraud can jump up to $500 if you don't report the loss or theft within two business days.
And if you are the type of person that gives a passing glance to your monthly bank statement, you could be totally liable for any fraudulent debit card charges if you wait 60 days or more from the time your statement is mailed.
Visa and MasterCard zero-liability protection applies to your debit card but only for transactions that do not involve the use of your PIN (personal identification number).
Additional protection against fraudulent use of your credit or debit cards may be available through your homeowner's or renter's insurance. Check your policy or with your agent for more information about your coverage.
Also be aware that you should contact your card issuer by certified letter, return receipt requested, after you've contacted them by phone to protect your consumer rights.
As for which card to use for what type of purchase, most experts agree that you should use your debit card for the same type of purchases you'd make as if you were using cash. Therefore, it makes more sense to use your debit card than your credit card at the grocery store or gas station (provided you have sufficient funds to cover these purchases of course).
Avoid using your debit card for any online purchase or for something which is expensive. Why ? You'll find it much easier to dispute a charge when you use your credit card. If your gold-plated, limited edition, hip-swinging Elvis wall clock arrives broken, your credit card company will remove the charge until the problem is resolved.
With your debit card you are stuck dealing with the merchant directly to resolve any problems with a purchase, even if your banking institution could really use a gold-plated, limited edition, hip-swinging Elvis wall clock of their very own.
See also:
Credit Card Basic
Credit Card Basics
Credit card basics
By: Mansi Gupta
“Which bank’s credit card do you have?”, “what is its credit limit”, “what type of card is it”…such questions are on everybody’s lips today. The world seems to have been squeezed and wrapped into a credit card. Nowadays everybody speaks and grasps the language of credit cards. The credit card syndrome seems to have gripped all of us.
But are credit cards only beneficial? Let us analyze the pros and cons of this pocket plastic and see what outweighs the other.
The Benefits of a Credit Card:
• Keep heavy cash in abeyance—money is the most coveted thing in this world. Carrying lot of cash wherever you go is always a bone of contention. A credit card facilitates you to travel without heavy cash and have a carefree and happy trip or shopping.
• Imagine yourself out for shopping in a wonderful mall. While you shop, you remember to take boots for your son, spectacles for mother, necklace for your beloved wife…but falling short of money! The credit card is your best friend in such a situation.
• Even if you lose your credit card, you need not be apprehensive and scared the way you get when you lose your cash. This is because you can get the card freezed or blocked from the bank and relax.
• Credit card works anywhere and everywhere nowadays. You just need to bag your card and make a move to any destination without bothering for money.
• Loan facility can also be availed via credit cards.
The Negative Aspect of Surge in Credit Card usage
• Generally everybody does not meet the eligibility criterion to hold a credit card. yet in order to enhance their sales and as part of marketing strategies, companies, private banks etc. do away with giving these cards to who so ever caters even to the minimum terms and conditions.
• The loan factor-the cards provide you with huge credit limits. The consumer ignorant of the forthcoming trouble, keeps on drawing money from his card and most often when he realizes his mistake, it is too late. He not only comes in the debt of the money he withdrew but also the massive interest that is charged by these companies and banks.
• Many credit card companies provide lucrative offers almost every month in the form of incentives. These incentives are basically meant to boost the sale of their product. Incentives like travel programs, gas purchases etc. are a very common phenomenon these days. But one should not get lured by these for it is well said that everything that glitters is not gold. Initially the cards might be promising for some cheerful moments but once you become habitual of them they can land you in soup.
• The addictiveness- it is most often the addictiveness of these cards that is a source of trouble. People, who keep on drawing from the bank’s or company’s credit, suffer largely.
• Debit cards are believed to be different from the credit cards. But actually the difference is minute. A debit card can also be used as a credit card at times and there are some eminent banks that charge fee with the debit cards too. So more or less the situation remains to be the same.
When you make up your mind to go for a debit card, consult some advisor. Know the details of the interest rate, the tenure to repay the amount and other such things. Do not be carried away by brand names. Just make a survey first and then decide which one to go for.
By: Mansi Gupta
“Which bank’s credit card do you have?”, “what is its credit limit”, “what type of card is it”…such questions are on everybody’s lips today. The world seems to have been squeezed and wrapped into a credit card. Nowadays everybody speaks and grasps the language of credit cards. The credit card syndrome seems to have gripped all of us.
But are credit cards only beneficial? Let us analyze the pros and cons of this pocket plastic and see what outweighs the other.
The Benefits of a Credit Card:
• Keep heavy cash in abeyance—money is the most coveted thing in this world. Carrying lot of cash wherever you go is always a bone of contention. A credit card facilitates you to travel without heavy cash and have a carefree and happy trip or shopping.
• Imagine yourself out for shopping in a wonderful mall. While you shop, you remember to take boots for your son, spectacles for mother, necklace for your beloved wife…but falling short of money! The credit card is your best friend in such a situation.
• Even if you lose your credit card, you need not be apprehensive and scared the way you get when you lose your cash. This is because you can get the card freezed or blocked from the bank and relax.
• Credit card works anywhere and everywhere nowadays. You just need to bag your card and make a move to any destination without bothering for money.
• Loan facility can also be availed via credit cards.
The Negative Aspect of Surge in Credit Card usage
• Generally everybody does not meet the eligibility criterion to hold a credit card. yet in order to enhance their sales and as part of marketing strategies, companies, private banks etc. do away with giving these cards to who so ever caters even to the minimum terms and conditions.
• The loan factor-the cards provide you with huge credit limits. The consumer ignorant of the forthcoming trouble, keeps on drawing money from his card and most often when he realizes his mistake, it is too late. He not only comes in the debt of the money he withdrew but also the massive interest that is charged by these companies and banks.
• Many credit card companies provide lucrative offers almost every month in the form of incentives. These incentives are basically meant to boost the sale of their product. Incentives like travel programs, gas purchases etc. are a very common phenomenon these days. But one should not get lured by these for it is well said that everything that glitters is not gold. Initially the cards might be promising for some cheerful moments but once you become habitual of them they can land you in soup.
• The addictiveness- it is most often the addictiveness of these cards that is a source of trouble. People, who keep on drawing from the bank’s or company’s credit, suffer largely.
• Debit cards are believed to be different from the credit cards. But actually the difference is minute. A debit card can also be used as a credit card at times and there are some eminent banks that charge fee with the debit cards too. So more or less the situation remains to be the same.
When you make up your mind to go for a debit card, consult some advisor. Know the details of the interest rate, the tenure to repay the amount and other such things. Do not be carried away by brand names. Just make a survey first and then decide which one to go for.
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