True wealth – There are many things that credit companies charge us for, above and beyond interest and balance transfer fees, which can be avoided with some planning as credit card usage does not mean a true wealth and many omit this part from wealth planning.
We all know that if you have a credit card, it’s always best to pay the balance you’ve charged in full by month’s end and this should a true wealth planning. After all, if we manage to do that, the credit card becomes very much like a debit card, which is in fact a true wealth, in a sense, except that we reap the rewards that credit card companies so often give promptly-paying customers. However, let us not fool ourselves with this apparently “good deed” on their part: it is the very fact that most people don’t pay the balance in full every month that keeps the entire credit industry in business. Of course, we understand and accept this as part of credit-card-life; after all, it is arguably the cost of borrowing money and not true wealth.
Interest Charges is no Better Finance
There is, however, a common practice that most of us wouldn’t accept so easily, if we were readily made aware of it: while most credit card companies start charging you interest for the purchase from the moment it’s posted on your account – assuming you don’t pay the balance by the end of the month, else there is no interest charge at all – there are quite a few of them that mark the start of the interest rate charge from when you actually made the purchase, which can be days before your account reflects the charge.
Why does this matter, you say in your better finance wealth planning? After all, one could argue that there shouldn’t be a problem since you purchased the item on that date. In truth, however, it isn’t really fair, because this means the company has started charging you interest for something they haven’t bought yet! In the highly automated computer systems of credit card companies, your account pretty much reflects the effects of their purchase in the time it takes an electron to fly from one end of the building to another! After all, if you were to cancel the charge in the time between when you charged it and they paid the merchant, you wouldn’t lose any money; so, why should they charge you interest during this inevitable “grace period”? Since only some credit card companies do this, it is best to find one that doesn’t, if you either intend or anticipate not being able to pay most of your credit-card bills by the end of the month.
Multiple Cycle-Billing
With credit card companies, there’s so much that goes on behind the scenes, it can be hard to keep track of what we should be paying attention to with our similarly hectic schedules. Consider the industry-norm 25-day-grace period you have to pay off your purchases before the interest rate actually matters and hits you in the wallet. As if to buttress the previous point that while credit companies often seem to reward those who pay in full monthly – before the finance charges strike – this is mostly for show, in order to entice more customers; after all, they’re only in business because most card-holders don’t pay off their balances each term, and their research shows them this will happen. Their true colors are shown by an increasingly common practice of lessening this grace period to 20 days. The grace period is lessened to around 23 or 20 days only for those cardholders who pay the monthly balance in full believing not to get into trap of non-true wealth. It’s almost as though they’re trying to catch you slipping, and of course, they do – to a percentage that makes this practice lucrative. All is not lost, however; all you have to do is ask them to return to the previous due date of 25 days.
Unsupportable Interest Charges again No Better Finance
Hidden – more often than not – in the tomes of credit-card lore, lies a practice that would widen most of our eyes were we aware of it. There are many credit-card companies that begin charging you interest not from the moment they actually buy the item you charged from the merchant, but from the moment YOU charged it, which can be several days’ difference. This means that they are slapping you with an interest charge for no defensible reason, logically, because interest can’t accrue on the promise of a charge; only on the charge, itself. Or so we would certainly argue.
It is a great idea to not only read the fine print of any credit cards you currently own, but to also call the card-issuer and ask them questions directly. After all, customer service is one of the things you pay them for from your true wealth of course.
