Avoiding paying fines and penalties on your credit card

Avoiding paying fines and penalties on your credit card

As a credit card holder, you’ve probably experienced receiving your credit card statement very late in your billing cycle, leaving you with very little time to pay up. This is as ploy some companies use to increase their earnings on late fees. The law states that these companies must mandatorily send out bills not less than 14 days before the due date. But since surface mail takes up to three days, you’re really left with just a week to pay your monthly installment.

However, there is a way out of this problem of paying late fees that you’re really not obliged to pay. The first step is to check that your statement does not contain a late fee amount, particularly if you’re paying within the stipulated date cycle. However, there are other ways of side-stepping this problem, such as:

• Pay online: Your credit card company does give you the facility of paying online, so why not take it? If this saves you precious time, it’s well worth making a payment that’s going to be processed within a business day.
• Set up automatic payments through your bank: Set up your bank account so that it automatically credits the amount on your credit card on a specific date every month. If your bank does not have this facility, it might have a bill pay facility. Select one date from the last day of payment and set the date of payment on this date when the amount will be debited to your credit card company.
• Mail your check on the same day each month: If you know how much you spend each month and what your minimum payment is, write out your check and send it off the moment you receive your statement or before. This way, you save mailing time. Add a return receipt so that you have a record of the date and time of posting it.
• Don’t use your credit card for instant cash: You’d be wise not to use your credit card at the ATM for cash as often, banks consider the money drawn from an ATM as a loan and charge you a percentage of the amount drawn as interest and usage fee. The interest charged here is much more than the interest rate on purchases made with a credit card.
• Cash advance? Think before you avail of it: If your card offers you a cash advance, obviously it means that a high rate of interest applies. You will also have to pay fees on late payments or returned checks or stop payments.
• How best to use your card abroad: When you’re abroad, ensure that you know how much you’re being charged as usage fees on foreign transactions.
• Use your card or else… Some credit card companies insist you use your card each month or they charge you inactivity fees. And you have to pay a certain monthly amount even when you don’t have any credit card balance.
• Be wary of fixed rates: Though you may enjoy the conveniences of a fixed interest rate, realize that this is not a permanent situation. If there is a change, you need be given only a 15-days’ notification to this effect. But by negotiation, they can be talked into retaining the same rate, so it’s always good to nurture a good relationship with your banker.
• Read the fine print carefully: When your credit card company sends you information pertaining to fraud protection, read it thoroughly.
• Closure fee: Some companies charge this to you when you finally close your account with them.

And finally, don’t go headlong into accepting a credit card without checking out its reputation with your family and friends. Ask how satisfied they are and what the pitfalls of taking such cards are. Learn to negotiate better with credit card companies because when you’re armed with such knowledge, you can decide the best card for yourself and the reasonableness of the penalties the card company levies.

By Mithi Chinoy

Related Movies and News

• The best air miles credit card for you
• Look for a business credit card that suits your business
• Fund your business with your credit card
• Applying for a credit card? Watch out for this jargon
• Taking a credit card-what to consider first
• The best time for you to lock a loan
• Keep your gadgets working better and longer
• What can you do with a photo printer?
• The right health insurance for your pet
• Kinds of credit cards and how to choose yours

Comments are welcome. CalcuttaTube does not modify the content of the comment as long as they meet website policy. Do not use abusive language and do not leave your PHONE NUMBER please. To report abuse email to admin@calcuttatube.com