It is no secret that owning a credit card bails you out of situations where you have splurged more than you intended to and don't have cash. With no money on hand, a credit card is your only option out. There are times when it is not feasible to carry large amount of money, especially while traveling. In these occasions, a credit card can be of great help. If you are an owner of a small business, then a business credit card is something you might like to have.
However, there are drawbacks to having credit cards. Here are some little-known facts about your credit card, which your card-issuing company probably wouldn't want you to know. One such credit card secret is interest backdating. This occurs when the issuer of your card starts interest charging from the day of your purchase, which is even before the shop has been compensated for your purchase.
Then, there is a system of double-cycle billing. In this, the issuer charges twice the interest amount in the first month if you fail to pay back the amount you owe. However, this is only applicable when you pay only the minimum amount payable each month.
Credit cards issued have annual charges and a high interest rate that you might be unaware of. Make sure you know how much interest you are being charged before you start using your credit card. This way, you can avoid any unpleasant surprises on your credit card bill.
Lastly, most credit card companies offer an interest-free period in which you can repay the amount you owe. However, the number of days in this grace period varies from one company to another. Hence, it is essential that you find this out before using the credit card.
One of the most dangerous things about credit cards is the vicious cycle that credit card debt can lead to. The best thing you can do is to get rid of the burden of credit card debt as soon as possible. The less-known credit card rules include charges on late payments and other such penalties. Make sure that you read the fine print carefully before signing the credit agreement.
Bankruptcy is a dire consequence that you have to face if you don’t pay off your credit card debt. You can consider your credit card payment history and use a debt consolidation service to pay the bills. These consolidation services offer you credit card help by dealing with the companies you are indebted to. They will consider your credit card repayment history, and your credit obligations will be paid back to the extent of 50% after eliminating the fees that have been included in your account. These consolidation services are of great help in that they make your credit card company lower the interest rate you are being charged.
You need to be careful and vigilant about how you use your credit cards which includes finding out all relevant information before you start using them.
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