Three Ways to Ensure You’re Not Paying More for Saying “Charge It” After the Holidays

by Bill on December 28, 2011

Everybody just got done with buying something for everyone, sort of. Now comes the fun part of paying for those purchases. The ability to charge purchases is now used by at least half of all Americans (and maybe Brits too). But how do you avoid paying for for using a credit card for holiday purchases? I’ve got three ways to ensure you’re not paying more after the holidays for saying “charge it”.

About Periodic Finance Charges
Finance charges on your card are what the banks charge you to have a balance on the car or use services. Control these charges by knowing how to calculate the charges. All the information you need is on your latest statement.

Find the current balance owed at the end of the billing cycle. Determine the interest rate on the balance, not the APR, the interest on the balance. Look at the back of the statement; this gives you either a 360 or 365 day year depending on the billing cycle; the billing cycle determines the interest rate. Divide the interest rate by either 360 or 365 (depending on your bank) to find the daily interest rate. Multiply that number by the number of days between billing cycles; this is the periodic interest rate. This number is the daily amount charged for carrying a balance.

Find the number of days between billing cycles. Add together the daily balance to find the sum. The minimum amount owed for your next payment is either the minimum amount owed by the bank, or the sum of the daily balance, whichever is lower.

Disputes, or “David vs. Goliath National Bank”
Disputes happen. And most often the banks will try to toss their weight and size around to make you and your problem vanish. DON’T
Gather every scrap of paper in the paper trail for the disputed transaction. This is why I tell people to save everything. Include payments, cancellations, returns, credits or financial statements showing transfer of funds. Many times larger institutions such as BofA or even smaller ones like PNC misplace information or it is not properly recorded.

Find the statute of limitations for your state. You may need this for legal action should it come that far. Knowing your rights with limitations, time lines and actions can save you valuable stress and cost.

Here’s a law you want to remember and look up. Federal law in regards to credit requires your debt be verified by any credit card company OR debt collector should you ask. Have this information mailed to you.

Avoid Quick and Easy
Here’s a way to ensure credit cards don’t cost you more after the holidays. Don’t make payments via automated teller, telephone or any other “quick and easy” method. Use the simple bill payment method provided – mail. You are charged fees for using these quick fix services which in turn raise the cost of using the card. Avoid automatic payments as well; these too, while not charged by your card, may be charged a fee to your account by your bank.

Using any one of these methods can help you avoid paying more to the banks or credit companies than you need to. They are hoping you don’t do so out of sheer laziness or not knowing or understanding how things work.

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{ 1 comment }

hickzsam December 29, 2011 at 8:12 am

At my last job the paid holidays that we got each year were New Year’s Day, Memorial Day, July 4, Labor Day, Thanksgiving and the day after, and Christmas Day. We were not offered any type of option to work on and get paid extra for federal holidays.
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