How To ‘Know’ Your Card
You know, you really cannot blame the card companies. They ensure that they provide you all the details. Now it is up to you to search the needle of truth in their haystack of information. Now, if you are like me and most others, you wouldn’t know much about credit cards except that you pay with them for something you purchase. Then you pay the bank at a later date with whatever the interest they charge. And, most important, try not to max the card.
Yes, been there, done that. But then a few questions began to nag me. How were they charging interest. How did they calculate the exact amount and how/ why did it change from person to person. Then there were the questions about outstanding balance, minimum payment… the works. Anyways, I must confess, all this had me a bit worried. So I decided to find out answers to my questions. And look what I found! Market-day.net reports:
Most people don’t CHOOSE to pay a high interest rate. The bank decides what interest rate it will charge you, usually based on how much of a ‘credit risk’ you are. They determine that by looking at your history of paying bills. If you’ve got a history of paying bills on time, then you’ll qualify for lower interest rates. If you haven’t ever had any bills to pay, or if you’ve had trouble paying your bills, that will show in your credit history, too. Since it’s a little riskier to lend you money, banks will charge a higher interest rate.
Read more: Credit Card Basics – Understanding Five Main Credit Card Terms
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