As a day-to-day credit card user it often becomes difficult to maintain the card including proper track of card balances. Here are some interesting tips on some credit cards APR details and how this may impact your life . Lets take a quick look into these interesting concepts now
1) What is a balance in terms of credit cards?
Credit cards calculate interest on amount remaining in account on a daily basis. Popularly this is called the daily balance. Henceforth,balance is a daily balance in credit card terms
2) What is an penalty APR?
A penalty APR is the APR that gets applied on your account balance.Usually credit card companies end the introductory APR and apply penalty APR if a late payment is made.
It first relates to creditworthiness. This varies based on prime market rate. This usually applies to your account if late payment is made, payment is returned
3) How is payment allocation calculated during credit card bill payments?
Portion of credit card payments upto minimum payment due are applied to lower APR balances first. This will include balance transferred balances and purchase balances. Payments above minimum payment due are applied to higher rate balance first
4) What are the different types of fees associated with credit cards?
Balance transfer fee usually 3% in most cases - This offers low interest rate credit for a specified time period
Cash Advance fees - Amount of fees on cash advances
Foreign purchase transaction - Fees on purchases made outside homecountry
Penalty fees - This can be late payment fees, returned payment fees which will be about $30 to $50 in some cases. This is too . Some companies choose to waive it once we speak to customer service representative
5) How do I avoid paying interest on purchases?
Usually in most credit card bill payments the due date is atleast 20+days after the close of each billing cycle. No interest is charged on purchases if the payment is made on entire account balance by the due each month. This is for cases wherein there are no 0% APR on purchases
1) What is a balance in terms of credit cards?
Credit cards calculate interest on amount remaining in account on a daily basis. Popularly this is called the daily balance. Henceforth,balance is a daily balance in credit card terms
2) What is an penalty APR?
A penalty APR is the APR that gets applied on your account balance.Usually credit card companies end the introductory APR and apply penalty APR if a late payment is made.
It first relates to creditworthiness. This varies based on prime market rate. This usually applies to your account if late payment is made, payment is returned
3) How is payment allocation calculated during credit card bill payments?
Portion of credit card payments upto minimum payment due are applied to lower APR balances first. This will include balance transferred balances and purchase balances. Payments above minimum payment due are applied to higher rate balance first
4) What are the different types of fees associated with credit cards?
Balance transfer fee usually 3% in most cases - This offers low interest rate credit for a specified time period
Cash Advance fees - Amount of fees on cash advances
Foreign purchase transaction - Fees on purchases made outside homecountry
Penalty fees - This can be late payment fees, returned payment fees which will be about $30 to $50 in some cases. This is too . Some companies choose to waive it once we speak to customer service representative
5) How do I avoid paying interest on purchases?
Usually in most credit card bill payments the due date is atleast 20+days after the close of each billing cycle. No interest is charged on purchases if the payment is made on entire account balance by the due each month. This is for cases wherein there are no 0% APR on purchases
