Posted on 13 August 2009
Tags: Average Daily Balance, average of the two cycles, Bankrate.com, Chase Visa Extras, check card awards, Continental Airlines Banking Card, Costs and Fees, credit card agreements, credit card company, credit card issuers, FAQs About Credit Card, FAQs About Credit Card Fees, Fed Funds rate, interest payment, interest rate, monthly balance, outstanding balance, two-cycle credit card billing, United Mileage Plus Check Card
Question: I’m searching for such a credit card that I have decided to use on special occasions and pay off the balance monthly. So what will be that card which is the best choice for avoiding hidden fees and clauses?
Answer: If you are planning that you will pay off the balance every month, then now you should be less concerned about the interest rate and you should have more concern about the grace period before which card company start charging you interest on your purchases.
Credit card agreements aren’t written as a rigid agreement. There are fluctuations in variable rates with changes in the Fed Funds rate, but so can rates on a fixed-rate card. The terms and conditions can be changed by card companies as needed to remain competitive with other credit card issuers. If you don’t like the way how a credit card issuer has changed the terms on your card, then you can vote with your feet and find a new card to for yourself. You can shop for a new card on bankrate.com. Wish you Good luck!
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Posted on 09 August 2009
Tags: actual balance, annual percentage rate, APR, Average Daily Balance, Billing Cycle, Calculation Methods, consumer, Costs, credit card company, Daily balance, fees, Finance charge, How Finance Charges are Figured, interest calculation, monthly finance charge, monthly payments, new purchases, Previous Balance, Two-cycle balance, Type of balance, zero balance
Surely, you have to pay the finance charge on your bill, but have you ever thought that how the credit card company arrives at the number?
Here you can check out four of the most common methods that are used to calculate finance charges. But I must warn you that the method alone only tells you a part of the story. To make sure that you are getting the best deal on a card, you should ask the company that how the company calculates the charges and whether they calculate interest on a daily or monthly basis. You should also find out if there is a grace period for new purchases. And have the company explained you that when and how your monthly payments are applied.
Calculation Methods
Type of balance: Average daily balance
How is it calculated: The company take out the average of your daily balance. For example, if you have charged $100 on 1st June and again charged an additional $200 on the 16th, then your average daily balance would be $200. That number is roughly one-twelfth your annual percentage rate, or APR, equals your monthly finance charge. The card company may calculate an interest on a daily or monthly basis.
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Posted on 01 August 2009
Tags: Adjusted Balance, Analyze your Credit History, annual fee, Average Daily Balance, base, billing statement, Choosing a Credit Card, comparison-shopping, Complex Formula, credit card, credit card companies, credit history, Federal Reserve discount rate, Figuring your Rate, Grace Period, index rate, interest rate, margin, margin number, monthly bill, multiplier, payment deadlines, Payment in full, payment profile, Payments, Previous Balance, the federal funds, unpaid balance, using a credit card, Ways to Compute your Balance
When it comes to choosing and using a credit card, then one of the key decisions that you’ll make is that whether you will pay your bill in total every month or just pay off part of it.
To know your “payment profile” is really very important for you.
There will be a balance left in case if you pay off just the minimum or even most of what’s due. So in order to know where you really stand, you’ll need to know that what interest rate is charged by your credit card to what’s not paid and it is also necessary to know that what you’ll be paying to maintain an unpaid balance.
Analyze your Credit History
Fees is applied by card companies to a number of card uses — for instance a late fee, or an over-the-limit fee. Before you go any further honestly take a look at your own credit history and analyze that which problems or habits are most likely to arise in your card use. You should be honest with yourself – have you missed payment deadlines more than you would have ever like? If yes than you should not select a card where the interest rate shoots up whenever you miss a payment.
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Posted on 08 July 2009
Tags: Adjusted Balance, APR, Average Daily Balance, Billing Cycle, billing periods, calculation of APR, Credit Card APR, credit card companies, Credit Score, economic downturns, economy, Ending Balance, Fixed APR, How to Calculate Credit Card APR, interest, Methods to Determine the Total Balance that Charge the Periodic Rate, Outstanding Balances, payment history, periodic percentage rate, Previous Balance, terms of credit card, the Periodic Rate, the Total Balance that Charge the Periodic Rate, Two-Cycle Average Daily Balance, Variable APR
If you are having a credit card for more than a month, then you might have noticed that your purchases are charged interest. Those cards which have no grace period, purchases are charged interest from the moment the purchase is made; while those having grace period (typically 21 days or so) at least give you some time to pay off the balance before that they begin charging interest on the remaining balance.

Here the thing that is really very important is that you do not fully understand the calculation of APR and that how the finance charges are included in it.
Every Credit Card Company Use Different Method to Calculate APR
All the Credit Card Companies don’t follow one-size-fits-all program for calculating your APR. According to law, it is the responsibility of the Credit Card Company to send you a written statement regarding how much you are charged in interest, and also the method which they’re using to calculate the interest. Typically it is written in a light-weight paper booklet that is received by you when you first receive the card and then after you receive it again whenever any change is made in the terms of your card.
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