Your interest is now based on your average daily balance.

So if you charge something on the 1st of the month, and your due date is the 30th, but you pay it (in full) on the 29th, be aware that you will still be charged interest on the balance from the 1st through the 29th of the month.

Some card still offer a grace period, but that is getting smaller and smaller…it used to be 30 days on all my cards, now some are as short as 15 days! Most are now 20 days. So I would HAVE to pay my card off on the 19th (or really, every 19 days), just to avoid interest.

To really “getchya” on this, many cards will also not let you send more than 3 payments in any one billing cycle, And/Or not let you send payments less than 5 days apart.

So unless you are really clever, alert, good at math, and thinking about what days you charge and pay your card, you are very likely to get “zinged” on interest SOMETIME or another. Granted, its probably only a few pennies…but if you’re attempting to pay $0, chances are the credit card company is going to make you fail at that, somehow.

I’ve outlined how I organize my bank statements on my blog - http://www.russellheimlich.com/blog/how-i-organize-my-bank-statements/

@RDS, Don: I’ve never really read the fine print. As to the reasons Don mentioned:
“For example, are you liable for fraudulent usage”
Never - this is not subject to fine print. Maybe with debit cards this could be bank’s policy, but credit cards are governed by Fair Credit Billing Act. The only thing that may be in fine print if whether you are responsible for the first $50 or not, but with most cards you aren’t.
“does the bank charge you any fee for early payment?”
Never seen a card which charges a fee for early payment. Has anybody? No, it isn’t a good idea to pay before the purchase cycled - i.e. when the “amount due” is 0, but simply because they may have bugs in their computer system with handling negative amounts. It’ll get resolved eventually, but just in case.
“What is considered “fee-able” payment - this can be end of the month, end of the week, end of the day.”
You should never let it get that close to the due date that this will become an issue.

Now, some fine print is useful - e.g. AmEx extended warranty protection or other rewards. But in general, paying in full by the due date makes reading the fine print far less important.

One mistake that we see all too often relates to balance transfers. Many people get excited about the promotional balance transfer rate, and transfer a large amount to the card. Then at some point in the future they use the card to purchase goods or services. The problem is that most credit card companies have policies that indicate that a customer’s payment will be first directed to the balances with the lowest interest rate. The net result is that the customers payments are directed towards the balance with the promotional rate, while the balance from the more recent purchases sits accruing interest charges at a much higher rate.

I know that regulators have been looking at cracking down on unethical credit card policies - I hope that they give customers the ability to choose which balances to apply their payments to in the future.

When fraud or theft occurs with a debit card, the money is sucked directly out of my checking account, and it can take several days to get the money back. No, thanks.

When theft or fraud has occurred with a credit card, the fraudulent charges are usually removed well before the next billing cycle. No money ever leaves my possession.

I’m much more comfortable avoiding debit cards and using credit cards intelligently. As always, your mileage may vary.

That is inaccurate. Debit cards issued through either visa or mastercard have the same fraud protections. My bank has zero liability on debit cards.

Using a credit card and having to deal with changing terms, universal default, grace periods, due dates, statements, payments, risk of “missing payment”. Yikes

And do you pay cash for your cars and houses?

That is true. Debit cards do have fine print. However, the fine print has zero to do with grace periods, interest rates, or any other changes which people have to be aware of. The fine print of my debit card has never affected my use of it. And the fine print doesn’t change.

Banks backing credit cards and banks backing debit cards are still out to make money off of you, it’s just credit card banks are much more vicious and predatory. They both have their fine print.

Debit Card

When it comes in the form of a check, a credit line starts to feel too close to free money.

Granted there’s something to be said for slowing down compulsive shopping…

I have yet to be in an “emergency” that required a credit card to cover it but I did have a college friend who had an artery burst in Mexico and they wouldn’t treat him until he paid…with a credit card. Card literally saved his life, which is sad.

Setting up Quicken and entering and categorizing every credit card receipt was a critical step in turning my finances around.

Paying on time and in full is the best credit card advice. And if you have a long history of doing such, you may be able to get away with a one-time late payment.

I was out of town and forgot to do my online accounting, and when I got back I realized I had missed my credit card due date. I called and they waived the fee because I had never been late before. Yay!

I don’t understand why people have so much love for this? The way I see it, it’s my money and I’m going to dictate when it leaves me account.

If it’s an issue of constantly forgetting to pay on time (the excuse I usually hear), then you have completely different problem altogether that needs to be addressed.

This is a subject I’ve been thinking alot about recently after I saw this.

http://valleywag.com/5044902/the-5-most-laughable-terms-of-service-on-the-net

There is no way I can effectively understand all the fine print. There is nothing I can do to change it. Every company now has these long contracts before you use their “service” even if it is only buying a piece of software. And it is not like there is a wide variety of choice for me if I disagree with what is in the contract. I would end up without any credit cards.

Also, if you schedule payments with your online banking account, you can still get screwed if you don’t check it every month and underpay or miss a payment because the payment date fluctuates sometimes as much as 10 days from month to month.

I have learned, the hard way, to look at every statement, every month, and even if you lose a little interest, try to pay the payment at least 5 business days early.

First, you always try to contact the company that’s charging you. That didn’t result in anything so I filed the dispute online on Chase’s website.

The whole process was relatively painless and they followed through with some very helpful people, ultimately resulting in the reversal of the charge - mostly due to me dealing with the company directly once I got a valid phone number.

I’ll admit, I was skeptical at first because I was afraid I was going to be farmed out to some offshore operator who couldn’t speak/comprehend english.

1. They can’t be discharged so easily in bankruptcy anymore due to recent changes in the law; and,

2. If you default on any of one of them, all of your other creditors are allowed to increase their interest rates as if you defaulted on them, too. VERY DANGEROUS!