Hidden – more often than not – in the tomes of credit-card lore, there’s a practice that would widen most eyes with surprise. Far too many credit-companies exist 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. This is important because there can be several days’ difference between the two.
This means they are slapping you with an interest charge for no defensible reason! After all, interest can’t gather on the promise of a charge; only on the charge, itself. Right?!
Why does this matter, you say? Consider: one could argue that there shouldn’t be a problem since you bought the merchandise on that date. In truth, however, it isn’t really fair, because this means the company has started charging you interest for an item you haven’t bought yet!
In the highly automated computer systems of credit card companies, your account reflects the effects of their purchase in the time it takes an electron to fly from one end of the building to another!
If you decided to annul the purchase 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”? It’s a good thing that only some credit companies do this; thus, it would be wise to find one that doesn’t – if you aren’t the kind of consumer to rectify your credit-card balances by month’s end.
It is important to realize that when dealing with credit companies, there’s so much that goes on behind the scenes, it can be hard to keep track of what you need to be paying attention to with so many other daily responsibilities. Another thing to watch out for are changes from the common 25-day interest-free period on purchases.
To buttress the previous point that whereas credit companies often seem to reward customers who settle their balances by the end of the month – and thus avoid carry-over fees – this is mostly just for appearances. They can bait more patrons with this tactic; after all, they’re only in business because most credit card-holders don’t pay off their balances each term, and their research assures them this will never happen.
Their underlying intentions are shown by an increasingly common habit of lessening the interest-free time-span to 20 days (in many cases, with little warning!). Compounding the underhanded nature of this whole action, the grace period is lessened to about 23 or 20 days solely for those cardholders who settle the monthly balance in full.