Smart tips on using your credit card
Tis the season to be generous but beware of the temptation to overspend and overuse credit; some smart tips for using your credit card over the holiday season. If you you plan to give your credit card a bit of a workout this Christmas consider a few tips and details which may save you some money and stress after the tree is down and the first credit card bill arrives.
True or False?
If you don’t pay off the full balance when the bill is due you pay interest only on the balance owing after the payment you made.
False. Many credit card agreements state if you do not pay the balance in full you will pay interest on the full amount. So if you have a $1000 balance and you pay $500 towards the bill you could pay interest on the full $1000 balance. Read the fine print on your agreement.
What is the true cost of interest?
A $2,000 credit balance with an 18% annual rate making only a minimum payment of 2% of the balance would take 370 months or just over 30 years to pay off. That translates to $4,931 in interest and charges – more than double the original balance.
So when you use your credit card unless you plan to pay it off in full when the bill is due—think about it. Are you willing to pay more for the item than the sticker price? Are you willing to pay double or more than the sticker price?
If you plan to make your purchases online consider some some smart tips for using your credit card . Do your due diligence on the company, consumer reports about the product, better business bureau, scams or other searches before you buy.
http://www.consumerprotectionbc.ca/consumers-alias/help-for-consumer-tips/298-consumercontracts/997-distancesalescontractstips
A credit card can be a great tool for making purchases any time of year. Be smart, be careful and be aware.